Jurisdictions that have strategic deficiencies with the AML/CFT standards as identified by the FATF and measures to be taken towards these jurisdictions

28 October 2011

This communication replaces previous communication of 24 June 2011.

(1) FATF Public Statement of 28 October 2011

The FATF identified in its public statement of 28 October 2011 12 jurisdictions that pose a significant risk to the international financial system due to their lack of a comprehensive AML/CFT regime, among which 2 jurisdictions for which the FATF furthermore requires taking countermeasures.

Taking into account the FATF’s public statement, and the ML/TF risks emanating from these jurisdictions, the persons and individuals subject to the Law of 11 January 1993 must apply enhanced customer due diligence measures for occasional transactions they carry out, or when entering into or maintaining a business relationship, with their customers when persons domiciled or established in one of these 12 jurisdictions or with any other links to these jurisdictions are involved in a transaction or a business relationship in whatever capacity (as a customer, proxy holder or beneficial owner).

This list will be updated after each FATF plenary meeting, which usually takes place in October, February and June each year. It is therefore advisable to regularly check CTIF-CFI’s website, especially in October, February and June to make sure one has the new updated list of non-cooperative jurisdictions and territories.

Jurisdictions subject to a FATF call on its members and other jurisdictions to apply countermeasures to protect the international financial system from the ongoing and substantial money laundering and terrorist financing (ML/TF) risks emanating from the jurisdictions

Iran

The FATF reaffirms its call on members and urges all jurisdictions to advise their financial institutions to give special attention to business relationships and transactions with Iran, including Iranian companies and financial institutions. In addition to enhanced scrutiny, the FATF reaffirms its 25 February 2009 call on its members and urges all jurisdictions to apply effective counter-measures to protect their financial sectors from money laundering and financing of terrorism (ML/FT) risks emanating from Iran.

FATF continues to urge jurisdictions to protect against correspondent relationships being used to bypass or evade counter-measures and risk mitigation practices, and to take into account ML/FT risks when considering requests by Iranian financial institutions to open branches and subsidiaries in their jurisdiction. If Iran fails to take concrete steps to improve its AML/CFT regime, the FATF will consider calling on its members and urging all jurisdictions to strengthen counter-measures in February 2012.

In this respect the CTIF-CFI also refers to the directly applicable restrictive measures, as well as the directly applicable counter-measures, imposed by the COUNCIL REGULATION (EU) No 961/2010 of 25 October 2010 on restrictive measures against Iran and repealing Regulation (EC) No 423/2007.

Democratic People's Republic of Korea (DPRK)

The FATF calls on its members and urges all jurisdictions to advise their financial institutions to give special attention to business relationships and transactions with the DPRK, including DPRK companies and financial institutions. In addition to enhanced scrutiny, the FATF further calls on its members and urges all jurisdictions to apply effective counter-measures to protect their financial sectors from money laundering and financing of terrorism (ML/FT) risks emanating from the DPRK.

Jurisdictions should also protect against correspondent relationships being used to bypass or evade counter-measures and risk mitigation practices, and take into account ML/FT risks when considering requests by DPRK financial institutions to open branches and subsidiaries in their jurisdiction.

In this respect the CTIF-CFI also refers to the directly applicable restrictive measures, imposed by the COUNCIL REGULATION (EC) No 329/2007 of 27 March 2007 concerning restrictive measures against the Democratic People's Republic of Korea.
 
Jurisdictions with strategic AML/CFT deficiencies that have not made sufficient progress in addressing the deficiencies* or have not committed to an action plan developed with the FATF to address the deficiencies. The FATF calls on its members to consider the risks arising from the deficiencies associated with following jurisdictions.

As mentioned here above, the persons and individuals subject to the Law of 11 January 1993 must apply enhanced customer due diligence measures for occasional transactions they carry out, or when entering into or maintaining a business relationship, with their customers when persons domiciled or established in one of these jurisdictions or with any other links to these jurisdictions are involved in a transaction or a business relationship in whatever capacity (as a customer, proxy holder or beneficial owner).

Bolivia
Cuba*
Ethiopia
Kenya
Myanmar
Nigeria
São Tomé and Príncipe
Sri Lanka
Syria
Turkey

*Cuba has not engaged with the FATF in the process.

(2) Improving Global AML/CFT Compliance: on-going process.

As part of its ongoing review of compliance with the AML/CFT standards, the FATF has to date identified the following jurisdictions which have strategic AML/CFT deficiencies for which they have developed an action plan with the FATF. While the situations differ among each jurisdiction, each jurisdiction has provided a written high-level political commitment to address the identified deficiencies. FATF welcomes these commitments. The FATF will continue to identify additional jurisdictions, on an ongoing basis, that pose a risk in the international financial system.

Taking into account this information, and the ML/TF risks emanating from these jurisdictions, it is recommended that the persons and individuals subject to the Law of 11 January 1993 take into account within their risk assessment system the specific risks linked to the following countries:

Algeria
Angola
Antigua and Barbuda
Argentina
Bangladesh
Brunei Darussalam
Cambodia
Ecuador
Honduras
Kyrgyzstan
Mongolia
Morocco
Namibia
Nepal
Nicaragua
Paraguay
Philippines
Sudan
Tajikistan
Trinidad and Tobago
Turkmenistan
Venezuela
Vietnam
Yemen
Zimbabwe

For further details on the deficiencies of each of these jurisdictions, please refer to the document Improving Global AML/CFT Compliance: on-going process.

Jurisdictions not making sufficient progress

The FATF is not yet satisfied that the following jurisdictions have made sufficient progress on its action plan agreed upon with the FATF. The most significant action plan items and/or the majority of the action plan items have not been addressed.

If these jurisdictions do not take sufficient action to implement significant components of its action plan by February 2012, then the FATF will identify these jurisdictions as being out of compliance with their agreed action plans and will take the additional step of calling upon its members to consider the risks arising from the deficiencies associated with these jurisdictions.

Taking into account this information, and the ML/TF risks emanating from these jurisdictions, it is recommended that the persons and individuals subject to the Law of 11 January 1993 take into account within their risk assessment system the specific risks linked to

Ghana
Indonesia
Pakistan
Tanzania
Thailand

For further details on the deficiencies of each of these jurisdictions, please refer to the document Improving Global AML/CFT Compliance: on-going process.