Advisory on the FATF-Identified Jurisdictions with AML/CFT Deficiencies

FIN-2016-A004 September 7, 2016
On June 24, 2016, the Financial Action Task Force (FATF) updated its list of jurisdictions with strategic AML/CFT deficiencies. These changes may affect U.S. financial institutions’ obligations and risk-based approaches with respect to relevant jurisdictions.

1. The FATF (www.fatf-gafi.org) is a 37-member intergovernmental policy-making 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.
2. The FATF public identification of countries with strategic AML/CFT deficiencies is in response to the G-20
   leaders’ call for the FATF to reinvigorate its process for assessing countries’ compliance with international AML/ CFT standards. The G-20 leaders have consistently called for the FATF to issue regular updates on jurisdictions with strategic deficiencies. Specifically within the FATF, the International Cooperation Review Group (ICRG) monitors and identifies countries with AML/CFT deficiencies. For more information on the ICRG procedures, please visit the FATF’s website – www.fatf-gafi.org/topics/high-riskandnon-cooperativejurisdictions/documents/ moreabouttheinternationalco-operationreviewgroupicrg.html.
3. 31 U.S. C. § 5318(h) and (i).
   Advisory on the FATF-Identified Jurisdictions with AML/CFT Deficiencies As part of the FATF’s listing and monitoring process to ensure compliance with the international Anti-Money Laundering and Countering the Financing of Terrorism (AML/ CFT) standards, the FATF identifies certain jurisdictions as having strategic deficiencies in their AML/CFT regimes.1 These jurisdictions appear in two documents: (I) the “FATF Public Statement,” which includes jurisdictions that are subject to the FATF’s call for countermeasures or are subject to Enhanced Due Diligence (EDD) due to their AML/CFT deficiencies, and (II) “Improving Global AML/CFT Compliance:
   on-going process,” which includes jurisdictions identified by the FATF to have AML/CFT deficiencies.2 On June 24, 2016, the FATF updated both of these documents with the concurrence of the United States. Financial institutions should consider these changes when reviewing their enhanced due diligence obligations and risk-based policies, procedures, and practices with respect to the jurisdictions noted below.3
   I. Jurisdictions that are subject to the FATF’s call for countermeasures
   or are subject to EDD due to their AML/CFT deficiencies The FATF has indicated that the following jurisdictions have strategic deficiencies in their AML/CFT regimes and has called upon its members and urged all jurisdictions to (A) impose countermeasures and/or (B) consider the risk arising from each jurisdiction due to a lack of sufficient progress in addressing AML/CFT deficiencies.