Earlier this year, FinCEN issued Advisory FIN-2019-A001, Advisory on the Financial Action Task Force-Identified Jurisdictions with Anti-Money Laundering and Combatting the Financing of Terrorism Deficiencies to reflect the Financial Action Task Force’s (FATF)1 recent updates to its list of jurisdictions with strategic anti-money laundering and combatting the financing of terrorism (AML/CFT) deficiencies.
As part of the FATF’s listing and monitoring process to ensure compliance with its international AML/CFT standards, the FATF identifies certain jurisdictions as having strategic deficiencies in their AML/CFT regimes. Specifically, within the FATF, the International Cooperation Review Group (ICRG) monitors and identifies jurisdictions with AML/CFT deficiencies.
These jurisdictions are named in two documents:
• The FATF Public Statement, which identifies jurisdictions that are subject to the FATF’s call for countermeasures and/or enhanced due diligence (EDD) because of their strategic AML/CFT deficiencies.
• Improving Global AML/CFT Compliance: On-going process, which identifies jurisdictions that the FATF has determined to have strategic AML/CFT deficiencies.
On February 22, 2019, the FATF updated both documents with the concurrence of the United States. Cambodia was added to the list due to the lack of effective implementation of its AML/ CFT framework. Cambodia has made a high-level political commitment to work with the FATF and the relevant FATF Style Regional Body (the Asia PacificGroup) to strengthen the effectiveness of its AML/CFT regime, and to address any related technical deficiencies. The FATF has stated that the following jurisdictions have strategic deficiencies in their AML/CFT regimes and has called upon its members and urged all jurisdictions to impose countermeasures and/or apply EDD proportionate to the risks arising from the jurisdiction:
• Countermeasures: Democratic People’s Republic of Korea (DPRK)
• Enhanced Due Diligence: Iran
The Advisory also reminds financial institutions of the status and obligations involving these jurisdictions, in particular, the Democratic People’s Republic of Korea (DPRK) and Iran. The FATF publicly identifies jurisdictions with strategic AML/CFT regime deficiencies for which the jurisdictions have developed an action plan with the FATF. Consequently, these jurisdictions are included in the following list of jurisdictions with strategicAML/CFT deficiencies:
• The Bahamas, Botswana, Cambodia, Ethiopia, Ghana, Pakistan, Serbia, Sri Lanka, Syria, Trinidad and Tobago, Tunisia, and Yemen.
Financial institutions should aware of these changes, which may affect their obligations and risk-based approaches with respect to these jurisdictions. Financial institutions should consider these changes when reviewing their obligations and risk-based policies, procedures, and practices with respect to the jurisdictions noted in the Advisory.
SAR Filing Instructions
When filing a Suspicious Activity Report (SAR), financial institutions should provide all pertinent available information in the SAR form and narrative. FinCEN requests financial institutions only use the updated mandatory SAR form (as of February 1, 2019) and reference the FIN- 2019-A001 Advisory in SAR field 2 (Filing Institution Note toFinCEN) by including the following key term: “February 2019FATF FIN-2019-A001” to indicate a connection between the suspicious activity being reported and the jurisdictions and activities highlighted in the Advisory.
1The FATF (www.fatf-gafi.org) is a 38-member intergovernmental body that establishes international standards to combat money laundering and counter the financing of terrorism and proliferation of weapons of mass destruction. The United States is a member of the FATF.