Palestine Monetary Authority

PALESTINE MONETARY AUTHORITY

Circular No. (20/2025)

To all banks operating in Palestine

Date: Thursday, February 27, 2025

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Subject: High-Risk Countries and Countries Under Enhanced Monitoring

Attached is a copy of the decision issued by the Financial Follow-Up Unit No. (2025/1) dated 2025/02/23 regarding High-Risk Countries and Countries Under Enhanced Monitoring according to the list issued by the Financial Action Task Force (FATF). Accordingly, it is requested to take the necessary legal measures to implement the requirements of the aforementioned decision and the measures to be taken in this regard, emphasizing the necessity to comply with the following:

1. Take into account concerns regarding deficiencies in Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) systems in countries classified within the "Grey List" (Countries Under Enhanced Monitoring), when conducting and updating the self-assessment of money laundering and terrorism financing risks.

2. Apply the Risk-Based Approach (RBA), such that the application of due diligence measures is proportional to (risk analysis results, nature of the financial transaction risk, counterparty risk, and country classification), with enhanced due diligence measures to be taken when high risks are perceived.

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Supervision Group
Palestine Monetary Authority

Copy: To the respected gentlemen/ Financial Follow-Up Unit

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www.pma.ps

Ramallah & Al-Bireh Governorate - Palestine P.O. Box 452 info@pma.ps | Fax: +970 2 2415310 | Tel: +970 2 2415251 | Postal code: P6160675

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Financial Follow-Up Unit

State of Palestine

Financial Follow-Up Unit

State of Palestine

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Decision No. (1/2025)

Issued by the Financial Follow-Up Unit

Dated 23/02/2025

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Regarding High-Risk Countries and Countries Under Enhanced Monitoring Lists

Based on the provisions of Law No. (39) of 2022 regarding the prevention of money laundering and the financing of terrorism and its amendments, particularly the provisions of Article (20) and paragraphs (3, 4) of Article (30), and based on the decision of the National Committee for Combating Money Laundering and the Financing of Terrorism No. (8/J/2016) issued on 01/12/2016, regarding the delegation to the Financial Follow-Up Unit to list high-risk countries issued periodically by the Financial Action Task Force (FATF), and subsequently decided by the Assembly since 21/02/2020, and where the Financial Action Task Force (FATF) issued the decision of the National Committee for Combating Money Laundering and the Financing of Terrorism No. (T/2020/5) dated 21/02/2025, and in addition to the decision of the National Committee for Combating Money Laundering and the Financing of Terrorism No. (2020/1) issued on 24/02/2020 regarding High-Risk Countries and Countries Under Enhanced Monitoring, and subsequently to the Financial Follow-Up Unit decision No. (2020/1) dated 25/02/2020 and subsequent decisions regarding High-Risk Countries and Countries Under Enhanced Monitoring lists.

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

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First

High-Risk Countries List (Black List)

All financial institutions, businesses, and designated non-financial businesses and professions in the State of Palestine must continue to apply the following procedures towards high-risk countries:

Country	Required Procedures Towards Countries
- Democratic People's Republic of Korea (North Korea)	1. Apply targeted financial sanctions in accordance with the provisions of Executive Decree No. (2022/14) regarding the implementation of Security Council resolutions.<br>2. Pay special attention to commercial relations and transactions with those countries, including companies and financial institutions, and apply the following countermeasures:<br>a. Take enhanced due diligence measures on business relations and transactions with those countries (as part of countermeasures), and in proportion to the risks arising therein, according to the details of Articles (26, 27) of the National Committee Instructions No. (4) of 2022 regarding Financial Institutions, and Articles (24, 25) of the National Committee Instructions No. (3) of 2022 regarding Designated Non-Financial Businesses and Professions.
- Islamic Republic of Iran (Iran)	1. Apply enhanced due diligence measures established in paragraph (a) of this clause when dealing with any entity acting on behalf of a natural or legal person, including companies or financial institutions operating in those countries.<br>c. Enhance reporting mechanisms adopted by the financial institution or one of the designated non-financial businesses and professions, including increasing cooperation between employees and rapidly providing data to the Anti-Money Laundering and Countering the Financing of Terrorism Compliance Officer within the financial institution or one of the designated non-financial businesses and professions, to ensure that no transaction or operation suspected of involving money laundering or one of the predicate crimes associated with it or terrorism financing is executed, and report this suspicion to the Unit immediately and without delay, providing it with all data related to attempting to conclude those transactions, while ensuring the confidentiality of the report and not notifying the customer.<br>d. Do not establish branches, representative offices, or subsidiaries in those countries.<br>e. Do not rely on third parties located in those countries to take any due diligence measures towards customers.<br>f. Do not establish any banking relationships or similar correspondent relationships with financial institutions in those countries.

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Second

Countries Under Enhanced Monitoring List (Grey List)

Amend the list of Countries Under Enhanced Monitoring (Grey List) stipulated in the Unit's decision No. (3/2024) by adding (the Lao People's Democratic Republic) and (the Federal Democratic Republic of Nepal (Nepal)), and removing (the Republic of the Philippines), so that the list becomes as in the table below, and taking into account concerns regarding deficiencies in Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) systems when conducting the self-assessment of money laundering and terrorism financing risks.

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Third

Enactment

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

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Director of the Financial Follow-Up Unit
Dr. Firas Murad

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Attachment: Concerns Regarding Deficiencies in Anti-Money Laundering and Countering the Financing of Terrorism Systems.

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Financial Follow-Up Unit

State of Palestine

Financial Follow-Up Unit

State of Palestine

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Countries Under Enhanced Monitoring List (Grey List)

Number	Country Name	Number	Country Name
1	Algeria	14	Monaco
2	Angola	15	Republic of Mozambique
3	Bulgaria	16	Republic of Namibia
4	Burkina Faso	17	Federal Democratic Republic of Nepal (Nepal)
5	Cameroon	18	Republic of Nigeria
6	Côte d'Ivoire (Ivory Coast)	19	Republic of South Africa
7	Croatia	20	Republic of South Sudan
8	Democratic Republic of the Congo	21	Syrian Arab Republic (Syria)
9	Republic of Haiti	22	Republic of Tanzania
10	Republic of Kenya	23	Venezuela
11	Lao People's Democratic Republic (Laos)	24	Vietnam
12	Republic of Lebanon	25	Republic of Yemen (Yemen)
13	Republic of Mali	-	-

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Enactment

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

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Director of the Financial Follow-Up Unit
Dr. Firas Murad

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Attachment: Concerns Regarding Deficiencies in Anti-Money Laundering and Countering the Financing of Terrorism Systems.

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Concerns Regarding Deficiencies in Anti-Money Laundering and Countering the Financing of Terrorism Systems

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Attachment to Financial Follow-Up Unit Decision No. (1/2025)

Regarding High-Risk Countries and Countries Under Enhanced Monitoring Lists

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Concerns Regarding Deficiencies in Anti-Money Laundering and Countering the Financing of Terrorism Systems in Countries

Part One: Deficiencies through Assessment Reports (All Countries)

This section shows how to access concerns regarding the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) system and proliferation financing in countries listed on the Grey List; in addition to all other countries subject to mutual evaluation by the Financial Action Task Force (FATF) or peer groups. Those concerns can be accessed by reviewing the mutual evaluation reports of those countries and the follow-up reports for this report.

Mutual evaluation reports (MERs) and follow-up reports on the FATF website or the MENA FATF website contain all deficiencies and main conclusions regarding the AML/CFT system in countries listed on the Enhanced Monitoring List and all other countries that underwent evaluation. Those can be obtained as follows:

1. Accessing mutual evaluation reports in English (all countries):

   1. Enter the website: www.fatf-gafi.org
   2. From the Topics menu, select (Mutual Evaluations)
   3. Select Mutual Evaluations Reports
   4. Search for the country name in English in the search window shown in the image on the side.

2. Accessing mutual evaluation reports in Arabic (for countries subject to evaluation by the MENA FATF):

   1. Enter the website: www.menafatf.org/ar
   2. Select the item (Mutual Evaluation) then (Evaluation Reports - Second Round of Evaluation), or follow-up reports.
   3. Select the report from the list that appears according to the country name.

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Illustrative image:

• Overview
• Mutual Evaluation Team
• Evaluation Reports
  • First Round of Evaluation
  • Second Round of Evaluation
  • Follow-up Reports

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Attachment to Financial Follow-Up Unit Decision No. (1/2025)

Regarding High-Risk Countries and Countries Under Enhanced Monitoring Lists

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Part Two: Implementation of Action Plans to Address Deficiencies

Countries listed on the Grey List have made a high-level political commitment to address strategic deficiencies related to Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) systems, and those countries are still implementing their commitments to address remaining deficiencies. The items below outline the key pillars that those countries are working to address or have addressed, which depend on specific deficiencies according to mutual evaluation reports and follow-up reports, which must be taken into account whether negative or positive:

Country	Key Pillars
Algeria	(Statement from October 2024)<br>In October 2024, Algeria made a high-level political commitment to work with the FATF and MENAFTF to strengthen the effectiveness of its AML/CFT regime. Since the adoption of its mutual evaluation report (MER) in May 2023, Algeria has made progress on many of the MER’s recommended actions including by more effectively pursuing money laundering investigations and prosecutions. Algeria will continue to work with FATF to implement its action plan by: (1) improving risk-based supervision, especially for higher risk sectors, including through the adoption of new procedures, risk assessments, supervision manuals and guidelines, as well as undertaking inspections and applying effective, proportionate and dissuasive sanctions; (2) developing an effective framework for basic and beneficial ownership information; (3) enhancing its regime for suspicious transaction reports; (4) establishing an effective legal and institutional framework for targeted financial sanctions for terrorism financing; and (5) implementing a risk-based approach to oversight of non-profit organisations, without disrupting or discouraging legitimate activity.
Angola	(Statement from October 2024)<br>In October 2024, Angola made a high-level political commitment to work with the FATF and ESAAMLG to strengthen the effectiveness of its AML/CFT regime. Since the adoption of its MER in June 2023, Angola has made progress on some of the MER’s recommended actions including enhancing national cooperation and coordination, international cooperation and the use of financial intelligence by competent authorities. Angola will continue to work with the FATF to implement its FATF action plan by: (1) enhancing its understanding of ML/TF risks; (2) improving risk-based supervision of non-financial banking entities and DNFBPs; (3) ensuring competent authorities have adequate, accurate and timely access to beneficial ownership information and that breaches to obligations are adequately addressed; (4) demonstrating an increase in ML investigations and prosecutions; (5) demonstrating the ability to identify, investigate and prosecute TF; and (6) demonstrating an effective process to implement targeted financial sanctions without delay.

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Attachment to Financial Follow-Up Unit Decision No. (1/2025)

Regarding High-Risk Countries and Countries Under Enhanced Monitoring Lists

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| Bulgaria | Since October 2023, when Bulgaria made a high-level political commitment to work with the FATF and MONEVAL to strengthen the effectiveness of its AML/CFT regime, Bulgaria has taken steps towards improving its AML/CFT regime, including by ensuring that the beneficial ownership information held in its Register is accurate and up-to-date and by identifying the subset of non-profit organisations (NPOs) most vulnerable to TF abuse. Bulgaria should continue to work on implementing its action plan to address its strategic deficiencies, including by: (1) addressing the remaining technical compliance deficiencies; (2) improving investigations and prosecutions of different types of money laundering in line with risks, including high-scale corruption and organised crime; (3) ensuring the ability to conduct parallel financial investigations in all terrorism investigations; (4) addressing gaps in the PFTFS frameworks; and (5) demonstrating initial implementation of risk-based monitoring of NPOs to prevent abuse for TF purposes. | | Burkina Faso | 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, Burkina Faso should continue to work on implementing its action plan to address its remaining strategic deficiency, by implementing an effective targeted financial sanctions regime related to TF and PF.<br><br>The FATF notes Burkina Faso’s continued progress across its action plan, however all deadlines have expired and work remains. The FATF urges Burkina Faso to swiftly implement its action plan to address the above-mentioned strategic deficiency as soon as possible as all deadlines expired in December 2022. | | Cameroon | In June 2023, Cameroon made a high-level political commitment to work with the FATF and GABAC to strengthen the effectiveness of its AML/CFT regime. Cameroon has taken steps to improve its AML/CFT regime by aligning AML/CFT national strategies and policies with the findings of the NRA; demonstrating AML/CFT cooperation and coordination between competent authorities; improving risk-based prioritisation of incoming international cooperation, and establishing a regime for violations of transparency obligations applicable to legal persons. Cameroon should continue working on implementing its action plan to address its strategic deficiencies, including by: (1) enhancing risk-based supervision of banks and implementing effective risk-based supervision for non-bank FIs and DNFBPs, and conducting appropriate outreach to high-risk FIs and DNFBPs; (2) maintaining and ensuring timely access by competent authorities to adequate and up to date beneficial ownership information on legal persons; (3) enhancing secure information exchange between the FIU, reporting entities and competent authorities and demonstrating an increase in dissemination of intelligence reports to support operational needs of competent authorities; (4) demonstrating that authorities are able to conduct a range of ML investigations, and prosecute ML in line with risks; (5) implementing policies and procedures for seizing and confiscating proceeds and instrumentalities of crime and managing frozen, seized and confiscated property, and prioritising seizure and confiscation of assets at the border; (6) demonstrating that TF investigations and prosecutions are pursued in line with risk; and (7) demonstrating effective implementation of |

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