FinCen has provided guidance for financial institutions on the latest Financial Action Task Force (FATF) announcement on countries with strategic AML deficiencies.
Iran and North Korea remain on FATF’s 'black list' of high risk jurisdictions. Countries 'under Increased Monitoring' (also known as the 'grey list') are: Albania, The Bahamas, Barbados, Botswana, Burma (Myanmar), Cambodia, Ghana, Iceland, Jamaica, Mauritius, Mongolia, Nicaragua, Pakistan, Panama, Syria, Uganda, Yemen, and Zimbabwe. This is the same set of countries FATF included on the list in February 2020.
Although FATF recognised that Iceland and Mongolia made significant progress in strengthening AML/CFT frameworks, they remain on FATF’s grey list.
US financial institutions must take into account the FATF listing in applying risk-based due diligence to persons located in and transactions involving these countries. The EU commission also includes these countries on its list of high risk third countries which FIs must take into account to apply enhanced due diligence under the 4/5th EU anti-money laundering directives. See previous alert here.
These changes may affect U.S. financial institutions’ obligations and risk-based approaches regarding relevant jurisdictions. The advisory also reminds financial institutions of the status and obligations involving these jurisdictions.