Update on the FATF Warning Lists

The Financial Action Task Force (FATF) has published two documents highlighting countries with shortcomings in their anti-money laundering and terrorist financing systems. These documents; “High-Risk Jurisdictions subject to a Call for Action” and “Jurisdictions under Increased Monitoring” can be found on the FATF’s website: http://www.FATF-gafi.org/.

The jurisdictions under increased monitoring; these countries show that they want to tackle shortcomings seriously. Other countries show less progress to combat these deficiencies, in particular the high-risk countries mentioned by the FATF in the ‘Call for Action’ (North Korea, Iran).

1. Impact of COVID-19 on monitoring process

In the above documents, the FATF mentions that due to COVID-19 it has decided to take a general break in the monitoring process of countries with shortcomings.
 

2. Iran

However, in its February 2020 plenary session, the FATF found that Iran has still not taken sufficient steps to address the serious shortcomings in its AML/CFT regime. As a result of this lack of progress, the FATF has lifted the suspension of countermeasures against Iran since this year. In particular, the FATF continues to have serious concerns about the risk of terrorist financing posed by Iran and its threat to the international financial system.
Against this background, the Dutch Central Bank (DNB) and the Ministry of Finance point out to institutions the continued importance of enhanced measures with regard to transactions and business relations which are related to Iran. On the basis of the FATF’s recommendations, it may be considered that additional information on the purpose and intended nature of the transactions or business relationships and the performance of enhanced monitoring by increasing the number of controls on transactions and business relationships and selecting transaction patterns that are further investigated can be considered.

 

3. North Korea

The FATF remains concerned about North Korea’s serious shortcomings in its approach to combating money laundering and terrorist financing and the serious threats it places on the integrity

of the international financial system. The FATF also has serious concerns about the threat posed by North Korea’s nuclear proliferation and proliferation financing. The DNB and the Ministry of Finance point out that enhanced measures with regard to relations with North Korean residents and the execution of transactions to/from this country are necessary, also with a view to the restrictive measures resulting from the UN and EU sanctions.

4. Jurisdictions under Increased Monitoring

The document ‘Jurisdictions under Increased Monitoring’ contains a list of countries that have serious shortcomings in their AML/CFT system, but which are committed to addressing these shortcomings. This list consists of the following countries:

  • Albania,
  • Barbados,
  • Botswana,
  • Burkina Faso,
  • Cambodia,
  • Cayman islands,
  • Ghana,
  • Jamaica,
  • Mauritius,
  • Morocco,
  • Myanmar,
  • Nicaragua,
  • Uganda,
  • Pakistan,
  • Panama,
  • Senegal,
  • Syria,
  • Yemen and
  • Zimbabwe.


Financial institutions are expected to comply with the specific circumstances in the context of the AML/CFT measures to be taken in respect of these countries.

In a subsequent plenary session, the FATF is expected to revise the documents if there is reason to do so. Due to COVID 19, this process may be delayed.

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