Palestine Monetary Authority

PALESTINE MONETARY AUTHORITY

Circular No. (198/2021) To all payment service companies operating in Palestine Date: Tuesday, October 26, 2021

Subject: High-Risk Countries and Countries Under Increased Monitoring

Attached is a copy of the decision issued by the Financial Follow-Up Unit No. (2021/3) dated 24/10/2021 regarding High-Risk Countries and Countries Under Increased Monitoring according to the list issued by the Financial Action Task Force (FATF).

Therefore, all payment service companies operating in Palestine are requested to take the necessary legal measures to implement the requirements of the aforementioned decision and the measures to be taken in this regard.

Supervision Group Palestine Monetary Authority

Copy: To the Honorable/ Financial Follow-Up Unit

---

Ramallah & Al-Bireh Governorate - Palestine P.O. Box 452 info@pma.ps | Fax: +970 2 2415310 | Tel: +970 2 2415251 Gaza - Palestine P.O. Box 4026 Fax: +970 8 2844487; Tel: +970 8 2825713 www.pma.ps

---

Financial Follow-Up Unit

State of Palestine

وحدة المتابعة المالية دولة فلسطين

Decision No. (2021/3) Issued by the Financial Follow-Up Unit Date: 24/10/2021

Regarding the lists of High-Risk Countries and Countries Under Increased Monitoring

Based on the provisions of Law No. (20) of 2015 regarding the combating of money laundering and terrorist financing and its amendments, particularly paragraph (16) of Article (20), and based on the decision of the National Committee for Combating Money Laundering and Terrorist Financing No. (8/J/2016) issued on 01/12/2016 regarding the delegation to the Financial Follow-Up Unit to publish the list of high-risk countries which is issued periodically by the Financial Action Task Force (FATF), and subsequently what was decided by the Group since 21/02/2020, until 21/10/2021, and in addition to the decision of the National Committee for Combating Money Laundering and Terrorist Financing No. (5/T/2020) issued on 24/02/2020 regarding High-Risk Countries and Countries Under Increased Monitoring, and subsequently to the Financial Follow-Up Unit Decision No. (2020/1) dated 25/02/2020 and subsequent decisions regarding the lists of High-Risk Countries and Countries Under Increased Monitoring.

And based on the requirements of public interest, it has been decided as follows:

First List of High-Risk Countries (Black List)

Continuation of the application of countermeasures against High-Risk Countries listed under paragraph (Second) of Financial Follow-Up Unit Decision No. (2020/1), where the list of High-Risk Countries consists of the following countries:

1. Democratic People's Republic of Korea (North Korea).
2. Islamic Republic of Iran (Iran).

FINANCIAL FOLLOW-UP UNIT وحدة المتابعة المالية

1/3

State of Palestine – Al Bireh P.O.Box 3981 Tel: +970 22422551\2 Fax: +970 22422553 E-mail: info@ffu.ps www.ffu.ps

---

Financial Follow-Up Unit

State of Palestine

وحدة المتابعة المالية دولة فلسطين

Second List of Countries Under Increased Monitoring (Grey List)

Modification of the list of Countries Under Increased Monitoring (Grey List) stipulated in the Unit's Decision No. (2021/2) by deleting both (Republic of Botswana, Republic of Mauritius) from the list, and adding both (Hashemite Kingdom of Jordan, Turkish Republic, Republic of Mali) and continuing to apply the procedures stipulated in paragraph (Fourth) of Financial Follow-Up Unit Decision No. (2020/1) to the countries on the Grey List (which now consists of the countries shown in the table below), taking into account the concerns regarding deficiencies in the AML/CFT systems of these countries as clarified in mutual evaluation reports and also in Attachment No. (1) to this decision.

Country Name	Number	Country Name	Number
Republic of Nicaragua	13	Republic of Albania	1
Islamic Republic of Pakistan (Pakistan)	14	Barbados	2
Republic of Panama	15	Burkina Faso	3
Republic of the Philippines	16	Kingdom of Cambodia	4
Republic of Senegal	17	Cayman Islands	5
Republic of South Sudan	18	Republic of Haiti	6
Syrian Arab Republic (Syria)	19	Jamaica	7
Turkish Republic	20	Hashemite Kingdom of Jordan (Jordan)	8
Republic of Uganda	21	Republic of Mali	9
Republic of Yemen (Yemen)	22	Republic of Malta	10
Zimbabwe	23	Kingdom of Morocco	11
Republic of the Union of Myanmar (Myanmar)	12

FINANCIAL FOLLOW-UP UNIT وحدة المتابعة المالية

2/3

State of Palestine – Al Bireh P.O.Box 3981 Tel: +970 22422551\2 Fax: +970 22422553 E-mail: info@ffu.ps www.ffu.ps

---

Financial Follow-Up Unit

State of Palestine

وحدة المتابعة المالية دولة فلسطين

Third Implementation

All financial institutions, designated non-financial businesses and professions are required to implement the provisions of this decision, and it shall be effective from the date of its circular.

Director of the Financial Follow-Up Unit Dr. Wael Lavi

Attachment: Concerns regarding deficiencies in the AML/CFT system.

FINANCIAL FOLLOW-UP UNIT وحدة المتابعة المالية

3/3

State of Palestine – Al Bireh P.O.Box 3981 Tel: +970 22422551\2 Fax: +970 22422553 E-mail: info@ffu.ps www.ffu.ps

---

Attachment Concerns regarding deficiencies in the AML/CFT system

---

Attached to Financial Follow-Up Unit Decision No. (2021/3) Regarding the lists of High-Risk Countries and Countries Under Increased Monitoring

Concerns regarding deficiencies in AML/CFT systems in Countries Under Increased Monitoring.

Part One: Deficiencies through Evaluation Reports Mutual evaluation reports (MERs) and follow-up reports published on the FATF website contain all deficiencies and main conclusions regarding the AML/CFT system in countries listed on the Increased Monitoring list, where this data must be taken into consideration, and these reports can be obtained via the following mechanism:

1. Enter the website http://www.fatf-gafi.org
2. Select the item (publications) then (mutual evaluations)
3. Search for the country name in English in the search window

Marked with the image shown beside.

Part Two: Implementation of Action Plans to Address Deficiencies The following countries have made a high-level political commitment to address strategic deficiencies related to AML/CFT systems, and these countries are still fulfilling their commitments to address remaining deficiencies. The items below outline the key areas that those countries are working to address or have addressed, which depend on specific deficiencies according to mutual evaluation reports and follow-up reports, where they must be taken into consideration whether negative or positive:

Country

Key Areas

Albania

Since February 2020, when Albania made a high-level political commitment to work with the FATF and MONEYVAL to strengthen the effectiveness of its AML/CFT regime, Albania has taken steps towards improving its AML/CFT regime, including by completing a long-term project to reduce the informal economy and use of cash through establishing electronic invoicing for business-to-government, business-to-business, and business-to-customer transactions. Albania should continue to work on implementing its action plan to address its strategic deficiencies, including by: (1) finalising the registration of real estate properties in Albania; (2) establishing more effective mechanisms to detect and prevent criminals from owning or controlling DNFBPs, including by passing a law on the licensing and regulation of real estate intermediaries; (3) ensuring that there are effective mechanisms for timely access

1

---

Attached to Financial Follow-Up Unit Decision No. (2021/3) Regarding the lists of High-Risk Countries and Countries Under Increased Monitoring

	by authorities to beneficial ownership information about companies as well as appropriate penalties for non-compliance or the provision of false information; (4) increasing the number of prosecutions for ML, especially in cases involving foreign predicate offences; and (5) demonstrating the continued use of asset seizures and securing final confiscations for the proceeds of crime, especially assets linked to third-party and professional money launderers, as well as indirect proceeds and equivalent value.
Barbados	Since February 2020, when Barbados made a high-level political commitment to work with the FATF and CFATF to strengthen the effectiveness of its AML/CFT regime, Barbados has taken steps towards improving its AML/CFT regime, including by applying risk based supervision and sanctions on FIs and TCSPs. Barbados should continue to work on implementing its action plan to address its strategic deficiencies, including by: (1) demonstrating an effective application of risk-based supervision DNFBPs; (2) taking appropriate measures to prevent legal persons and arrangements from being misused for criminal purposes, and ensuring that accurate and up-to-date basic and beneficial ownership information is available on a timely basis; (3) ensure its FIU’s financial information products further assist law enforcement authorities in investigating ML or TF; (4) demonstrating that ML investigations and prosecutions are in line with the country’s risk profile and result in sanctions, when appropriate, and reducing the backlog in completing cases; (5) further pursuing confiscation in ML cases, including by seeking assistance from foreign counterparts.
Burkina Faso (Statement from February 2021)	In February 2021, Burkina Faso made a high-level political commitment to work with the FATF and GIABA to strengthen the effectiveness of its AML/CFT regime. Since the completion of its MER in 2019, Burkina Faso has made progress on a number of its MER recommended actions to improve technical compliance and effectiveness, including by adopting a national AML/CFT strategy in December 2020. Burkina Faso will work to implement its action plan, including by: (1) adopting and implementing follow-up mechanisms for monitoring actions in the national strategy; (2) seeking MLA and other forms of international cooperation in line with its risk profile; (3) strengthening of resource capacities of all AML/CFT supervisory authorities and implementing risk based supervision of FIs and DNFBPs; (4) maintaining comprehensive and updated basic and beneficial ownership information and strengthening the system of sanctions for violations of transparency obligations; (5)

2

---

Attached to Financial Follow-Up Unit Decision No. (2021/3) Regarding the lists of High-Risk Countries and Countries Under Increased Monitoring

	increasing the diversity of STR reporting; (6) enhancing FIU’s human resources through additional hiring, training and budget; (7) conduct training for LEAs, prosecutors and other relevant authorities; (8) demonstrating that authorities are pursuing confiscation as a policy objective; (9) enhancing capacity and support for LEAs and prosecutorial authorities involved in combatting TF, in line with the TF National Strategy; and (10) implementing an effective targeted financial sanctions regime related to terrorist financing and proliferation financing as well as risk-based monitoring and supervision of NPOs.
Cambodia	Since February 2019, when Cambodia made a high-level political commitment to work with the FATF and APG to strengthen the effectiveness of its AML/CFT regime and address any related technical deficiencies, Cambodia has taken some steps toward improving its AML/CFT regime, including by demonstrating sanctions being applied to FIs for AML/CFT breaches. However, Cambodia should take urgent action to fully address remaining measures in its action plan as all timelines have already expired. Cambodia should therefore continue to work on implementing its action plan to address its strategic deficiencies, including by: (1) enhancing disseminations of financial intelligence to law enforcement authorities in connection with high-risk crimes; (2) demonstrating an increase in ML investigations and prosecutions in line with risk; (3) demonstrating an increase in the freezing and confiscation of criminal proceeds, instrumentalities, and property of equivalent value; (4) demonstrate that implementation of targeted financial sanctions (TFS) related to PF is occurring by providing training to strengthen the skills of competent authorities to implement PF TFS, and enhance the understanding of sanctions evasion.
The Cayman Islands	In February 2021, the Cayman Islands made a high-level political commitment to work with the FATF and CFATF to strengthen the effectiveness of its AML/CFT regime. The Cayman Islands should continue to work on implementing its action plan to address its strategic deficiencies, including by: (1) imposing adequate and effective sanctions in cases where relevant parties (including legal persons) do not file accurate, adequate and up-to-date beneficial ownership information in line with those requirements; and (2) demonstrating that they are prosecuting all types of money laundering cases in line with the jurisdiction’s risk profile and that such prosecutions are resulting in the application of dissuasive, effective, and proportionate sanctions.

3