FinCEN Advisory - FIN-2013-A008
Advisory Information
On October 18, 2013, the Financial Action Task Force (FATF) updated its list of jurisdictions with strategic AML/CFT deficiencies. These changes may affect U.S. financial institutions’ obligations and risk-based approaches with respect to relevant jurisdictions.
As part of the FATF’s listing and monitoring process to ensure compliance with the international Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) standards, the FATF identified certain jurisdictions as having strategic deficiencies in their AML/CFT regimes.1 The FATF updated its lists of jurisdictions that appear in two documents:2 (I) jurisdictions that are subject to the FATF’s call for countermeasures or are subject to Enhanced Due Diligence (EDD) due to their AML/CFT deficiencies (referred to by the FATF as the ’FATF Public Statement’) and (II) jurisdictions identified by the FATF to have AML/CFT deficiencies (referred to by the FATF as ‘Improving Global AML/CFT Compliance: On-going Process’). Financial institutions should consider these changes when reviewing their obligations and risk-based approaches with respect to the jurisdictions noted below.
I. Jurisdictions that are subject to the FATF’s call for countermeasures
or are subject to EDD due to their AML/CFT deficiencies
The FATF has indicated that the following jurisdictions have deficiencies in their AML/CFT regimes and called upon its members and urged all jurisdictions to (A) impose countermeasures or (B) consider the risk arising from each jurisdiction due to a lack of sufficient progress in addressing AML/CFT deficiencies. FinCEN is advising U.S. financial institutions to apply enhanced duediligence for countries in category (B) (for additional details, see the FinCEN Guidance sectionbelow). Accordingly, all these jurisdictions are included in the FATF Public Statement.
Please click on each jurisdiction for additional information.
A. Countermeasures:
Iran and Democratic People’s Republic ofKorea (DPRK).
B. Enhanced Due Diligence:
Algeria, Ecuador, Ethiopia, Indonesia,Kenya, Myanmar, Pakistan, Syria, Tanzania,Turkey, and Yemen.
Summary of Changes to this List
Vietnam is now recognized as having madesignificant progress to address its FATFidentifiedstrategic AML/CFT deficiencies.Consequently, the FATF has now includedVietnam in its Improving Global AML/CFTCompliance: On-going Process documentand removed it from the FATF PublicStatement (see below).
While São Tomé and Príncipe has maderecent progress, its AML/CFT framework stillcontains a number of strategic deficiencies.Given the small size of this country’sfinancial sector and its low impact on theinternational financial system, however,
Despite Algeria’s high-level politicalcommitment to work with the FATF to addressits strategic AML/CFT deficiencies, Algeria hasnot made sufficient progress. Consequently,the FATF has now placed Algeria on the FATF PublicStatement and removed it from itsImproving Global AML/CFTCompliance: On-going Process document.
II. Jurisdictions identified by the FATF to have AML/CFT deficiencies
The FATF has identified the following jurisdictions as having deficiencies in their AML/CFTregimes, for which they have developed an action plan with the FATF. Consequently, thesejurisdictions are included in the following list of jurisdictions with AML/CFT deficiencies (asdescribed in the FATF’s Improving Global AML/CFTCompliance: On-going Process document.).
Please click on each jurisdiction for additional information.
Afghanistan, Albania, Angola,Antigua and Barbuda, Argentina, Bangladesh, Cambodia, Cuba,Iraq,
Kuwait,Kyrgyzstan, Lao PDR,Mongolia, Namibia, Nepal, Nicaragua,Sudan, Tajikistan, Vietnam, and Zimbabwe.
Summary of Changes to this List
Due to their significant progress inaddressing all or nearly all of their strategicAML/CFT deficiencies, Morocco and Nigeriahave been removed from the FATF listingand monitoring process. These jurisdictionswill work with their respective FATF-StyleRegional Bodies as they continue to addressthe full range of AML/CFT issues identifiedas part of the mutual evaluation process.
Vietnam has made progress in largelyaddressing its FATF action plan and is nowidentified on this list, having moved from theFATF Public Statement (see Section I above).
Algeria has not made sufficient progressin addressing its strategic AML/CFTdeficiencies; consequently, Algeria wasremoved from this list and moved to theFATF Public Statement (see Section I above).
Iraq has also been identified on this listbecause of strategic deficiencies in its AML/CFT regime. Iraq has made a high-levelpolitical commitment to work with theFATF and the Middle East & North AfricaFinancial Action Task Force to address itsdeficiencies.
FinCEN Guidance regarding jurisdictions listed in Section I of this Advisory |
A. Jurisdictions Subject to Countermeasures
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FinCEN Guidance regarding jurisdictions listed in Section II of this Advisory |
U.S. financial institutions should consider the risks associated with the AML/CFT deficienciesof the countries identified under this section (Afghanistan, Albania, Angola,Antigua and Barbuda, Argentina, Bangladesh, Cambodia, Cuba,Iraq, Kuwait,Kyrgyzstan, Lao PDR,Mongolia, Namibia, Nepal, Nicaragua,Sudan, Tajikistan, Vietnam, and Zimbabwe.). Withrespect to these jurisdictions, U.S. financial institutions are reminded of their obligations tocomply with the general due diligence obligations under 31 CFR § 1010.610(a). As requiredunder 31 CFR § 1010.610(a), covered financial institutions should ensure that their due diligenceprograms, which address correspondent accounts maintained for foreign financial institutions,include appropriate, specific, risk-based, and, where necessary, enhanced policies, procedures,and controls that are reasonably designed to detect and report known or suspected moneylaundering activity conducted through or involving any correspondent account established,maintained, administered, or managed in the United States. |
FinCEN General Guidance |
For jurisdictions that have been recently removed from the FATF listing and monitoringprocess, financial institutions should take the FATF’s decisions and the reasons behind thedelisting into consideration when assessing risk. If a financial institution knows, suspects, or has reason to suspect that a transaction involvesfunds derived from illegal activity or that a customer has otherwise engaged in activitiesindicative of money laundering, terrorist financing, or other violation of federal law orregulation, the financial institution shall then file a Suspicious Activity Report.12 |
Additional questions or comments regarding the contents of this Advisory should be addressed tothe FinCEN Resource Center at 703-905-3591. Financial institutions wanting to report suspicioustransactions that may relate to terrorist activity should call the Financial Institutions Toll-FreeHotline at (866) 556-3974 (7 days a week, 24 hours a day). The purpose of the hotline is to expeditethe delivery of this information to law enforcement. Financial institutions should immediatelyreport any imminent threat to local-area law enforcement officials.