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Financial Institutions Face New Anti-Money Laundering Requirements in North Korea
Washington - The Financial Crimes Enforcement Network (FinCEN) has warned US financial institutions to take new anti-money laundering requirements into account when dealing with the Democratic People’s Republic of Korea (DPRK), following a recent update from the Financial Action Task Force (FATF).
Correspondent Account Requirements
FinCEN is reminding US financial institutions of their obligations under Section 1010.610(a) to ensure that their due diligence programs address correspondent accounts maintained for foreign financial institutions (FFIs). This includes taking reasonable steps to detect and report known or suspected money laundering activity conducted through or involving any correspondent account established, maintained, administered, or managed in the United States.
High-Risk Jurisdictions
The FATF has also identified several high-risk jurisdictions subject to a call for action, including North Korea. US financial institutions must comply with the extensive restrictions and prohibitions against opening or maintaining any correspondent accounts directly or indirectly for these countries.
Key Points:
- North Korea is one of several countries subject to counter-measures due to its strategic deficiencies in anti-money laundering and combating the financing of terrorism (AML/CFT).
- US financial institutions must comply with extensive restrictions and prohibitions against opening or maintaining correspondent accounts for North Korean financial institutions.
- The OFAC-administered sanctions program imposes obligations on US persons that go beyond the relevant FATF recommendations.
Additional Requirements
US financial institutions must also comply with additional requirements related to foreign agents or foreign counterparties, as described in FinCEN Interpretive Release 2004-1. This includes establishing adequate and appropriate policies, procedures, and controls commensurate with the risk of money laundering and the financing of terrorism posed by their relationship with foreign agents or foreign counterparties.
Suspicious Activity Reporting
If a financial institution knows, suspects, or has reason to suspect that a transaction involves funds derived from illegal activity or that a customer has otherwise engaged in activities indicative of money laundering, terrorist financing, or other violation of federal law or regulation, the financial institution must file a Suspicious Activity Report.
Questions and Comments
Questions or comments regarding the contents of this release should be addressed to the FinCEN Regulatory Support Section at frc@fincen.gov.