Regulatory Alerts2011-01-25 | Circular 01/2011 (GW) - Obstacles to compliance with due diligence obligations in transactions and business relationships with Iran as a result of evasive transactionsCircular 01/2011 (GW) – Enhanced Due Diligence for Iranian Transactions and Evasive Payment Routes
The German Federal Financial Supervisory Authority (BaFin) mandates enhanced customer due diligence for all financial transactions and business relationships involving Iranian residents, legal entities, and accounts held in Iran. Recent FATF assessments highlight elevated money laundering and terrorism financing risks, particularly as Iranian payers increasingly route payments through Gulf State exchange trading firms to conceal their origin and bypass standard country-code monitoring systems. Institutions must adapt their internal safeguards and computer-based monitoring mechanisms to detect these evasive transactions, triggering appropriate risk-mitigation measures or transaction suspensions when doubts regarding customer identity, asset origin, or beneficial ownership arise.