BaFin Circular 08/2014 (GW) – FATF Public Statement and Information Report on Iran, North Korea, and Other Countries

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FATF
Public Statement regarding Iran, the Democratic People's Republic of Korea (North Korea) and other countries; FATF Information Report of 24 October 2014 regarding countries under review; Administrative practice

Business sign: GW 1-GW 2001-2008/0003

21.11.2014

This circular is intended for: credit institutions, financial services institutions, payment institutions, e-money institutions, agents pursuant to section 1 (7) of the Payment Services Supervision Act (Zahlungsdiensteaufsichtsgesetz – ZAG ), e-money agents pursuant to section 1a (6) of the ZAG , enterprises and persons pursuant to section 2 (1) no. 2c of the Money Laundering Act (Geldwäschegesetz – GwG ), Investment management companies (Kapitalverwaltungsgesellschaften), branches of EU management companies and foreign AIF management companies, foreign AIF management companies for which the Federal Republic of Germany is a reference Member State and which are supervised by the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin ) pursuant to section 57 (1) sentence 3 of the Capital Investment Code (Kapitalanlagegesetzbuch – KAGB ), insurance undertakings offering life insurance contracts or accident insurance contracts with premium refunds, as well as financial holding companies and mixed financial holding companies in the Federal Republic of Germany

Re.
:
FATF
Public Statement and Information Report of 24 June 2014 and BaFin Circular 6/2014 ( GW ) of 14 July 2014 as well as BaFin Circulars 2/2010 of 22 March 2010 and 2/2012 of 21 March 2012

I.
FATF
Public Statement of 24 October 2014 regarding Iran, the Democratic People's Republic of Korea (North Korea) and other countries

During its Plenary Meeting held in Paris on 24 October 2014, the FATF released an updated Public Statement and an updated Information Report (see II).

The Statement issued by the
FATF on 24 October 2014 (
Annex 1
) concerns jurisdictions for which substantial deficiencies have been identified regarding measures to combat money laundering and terrorist financing.

Category 1: Jurisdictions subject to a
FATF call on its members and other jurisdictions to apply counter-measures to protect the international financial system from the on-going and substantial money laundering and terrorist financing ( ML/TF ) risks emanating from the jurisdictions.

This category still includes Iran and the Democratic People's Republic of Korea (North Korea). The FATF's Public Statement of 24 June 2014 and BaFin Circular 6/2014 ( GW ) continue to apply to both countries. Please refer to BaFin Circular 2/2010 ( GW ) for information on the measures that still have to be taken.

Category 2: Jurisdictions with strategic
AML/CFT deficiencies that have not made sufficient progress in addressing the deficiencies or have not committed to an action plan developed with the FATF to address the deficiencies. The FATF calls on its members to consider the risks arising from the aforementioned deficiencies associated with each jurisdiction.

This category now includes Algeria, Ecuador, Indonesia and Myanmar.

Business relationships with these countries or with business partners who reside in these countries or transactions from or to these countries require enhanced due diligence and organisational requirements in order to combat the increased risks identified by the FATF . In addition, the results of any security and review measures taken in this respect are to be clearly documented for the internal audit function, the audit of annual financial statements and any special audits. These measures correspond to those specified in BaFin Circular 2/2010 ( GW ).

II.
FATF
Information Report of 24 October 2014 regarding countries under review

In the ongoing review of countries by the
FATF and the
FATF
-style regional bodies (
FSRBs
), certain countries continue to have deficiencies with regard to the FATF's key recommendations.

For details, please refer to the translated
FATF
Information Report of 24 October 2014 (
Annex 2
).

Although there is no direct obligation to take action and no requirement to apply enhanced due diligence and organisational requirements appropriate for the increased risk with respect to these countries, the situation in these countries must be taken into consideration when assessing the risks of these countries or persons from these countries in the context of preventing money laundering and terrorist financing.

III. Administrative practice in relation to section 11 of the
GwG

Subsequent to my circular 1/2014 (
GW
) no.
I I would point out, that the Federal Ministry of Finance (Bundesministerium der Finanzen – BMF ) has published an updated version of its guidance notes on notification of suspicion in the area of anti-money laundering measures pursuant to section 11 of the GwG on its website.

Against this background I also amended accordingly the guidance notes on notification of suspicion in the area of anti-money laundering measures pursuant to section 11 of the GwG being posted on the website of BaFin under the section "Anti-Money Laundering" that I published additionally by circular specified above. I therefore call on to use only this updated version.

Additional information

Circular 06/2014 (
GW
) - Annex 1:
FATF
Public Statement

Circular 06/2014 (
GW
) - Annex 2: Improving Global
AML

Circular 06/2014 (
GW
) -
FATF
Public Statement and Information Report

Circular 2/2012 (
GW
)

Circular 2/2010 (
GW
)

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