Written by Eliott C. Ponte, Regulatory Compliance Counsel
On January 19, the Financial Crimes Enforcement Network (FinCEN) issued an advisory, FIN-2016-A001, to provide guidance on the list of jurisdictions identified by the Financial Action Task Force (FATF). The release of this advisory comes in response to FATF updating its list of jurisdiction with strategic Anti-Money Laundering and Counter-Terrorist Financing (AML/CTF) deficiencies.
FATF is an inter-governmental policymaking body that proposes international standards and policies to combat money laundering and terrorist financing. Since the late 1980’s, FATF has issued several recommendations that aim to protect the international financial system from money laundering and financing of terrorism risks. Moreover, FATF encourages greater compliance with the anti-money laundering standards. Most recently, FATF published two statements identifying those jurisdictions that are deemed to have “strategic deficiencies” in their anti-money laundering and counter terrorist financing regimes.
FinCENs advisory acknowledges FATF’s update and provides guidance for financial institutions engaging with listed jurisdiction. These jurisdictions appear in two documents: (1) “FATF Public Statement”, which consists of jurisdictions that are subject to FATF’s call for countermeasures or are subject to Enhanced Due Diligence due to their Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) deficiencies; and, (2) “Improving Global AML/CFT Compliance: On-going Process,” which consists of jurisdictions identified by FATF to have AML/CFT deficiencies.
Based on FATF’s recent changes, FinCEN is recommending that financial institutions impose countermeasures or consider the risk arising due to a lack of sufficient progress in addressing AML/CFT deficiencies in the countries of Iran and the Democratic People’s Republic of Korea. FinCEN is also recommending that institutions apply enhanced due diligence for the country of Myanmar. FinCEN notes, however, that the country of Aleria has made progress in addressing its FATF action plan. As a result, Algeria has been removed from the “FATF Public Statement” and now includes this jurisdiction in its “Improving Global AML/CFT Compliance: On-going Process” document. The list of these countries in this document include Afghanistan, Algeria, Angola, Bosnia and Herzegovina, Guyana, Iraq, Lao PDR, Panama, Papua New Guinea, Syria, Uganda, and Yemen.
FinCEN instructs financial institutions to continue to apply countermeasures to protect against AML/CFT risks. For more information, credit unions should consult the FinCEN Advisory.
CUSO Registry Webinar
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