Circular Letter No. CC/2022/00000039

Circular Letter No. CC/2022/00000039
Sent to:
Credit Institutions, Financial Companies, Payment Institutions, and Electronic Money Institutions.
Mod. 40000375/T – 01/14
Subject: Disclosure of FATF communications (October 2022 plenary meeting)

I. COMMUNICATIONS ISSUED BY THE FATF
With the aim of protecting the international financial system from the risks associated with money laundering and terrorist financing, as well as fostering adequate compliance with AML/CFT standards, the FINANCIAL ACTION TASK FORCE (FATF) acts to identify jurisdictions presenting strategic deficiencies in matters of money laundering and terrorist financing and to develop, at the global level, coordinated and decisive responses to combat these realities.

Following the plenary meeting held between October 20 and 21, 2022, the FATF published the following documents:
a. HIGH-RISK JURISDICTIONS SUBJECT TO A CALL FOR ACTION, dated October 21, 2022, which identifies jurisdictions subject to countermeasures and jurisdictions with strategic deficiencies in preventing money laundering and terrorist financing that have not yet made sufficient progress in overcoming these deficiencies and/or have not agreed with the FATF on an action plan for this purpose. The full content of this document can be consulted at: http://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/call-for-action-march-2022.html https://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/call-for-action-october-2022.html b. JURISDICTIONS UNDER INCREASED MONITORING, dated October 21, 2022, which identifies jurisdictions with strategic deficiencies in preventing money laundering and terrorist financing that have developed an action plan to overcome them and are subject to a monitoring process by the FATF. The full content of this document can be consulted at: https://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/increased-monitoring-october-2022.html http://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/increased-monitoring-march-2022.html http://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/increased-monitoring-march-2022.html http://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/increased-monitoring-march-2022.html

Regarding these documents, the following should be noted:

• Regarding the list of High-Risk Jurisdictions Subject to a Call for Action:
• The review process for the Democratic People's Republic of Korea (North Korea) and the Islamic Republic of Iran has been conditioned by pandemic restrictions, which is why the above-mentioned document refers to the content of the February 2020 communication regarding these two jurisdictions;
• A new category has been included – Jurisdiction subject to a FATF call on its members and other jurisdictions to apply enhanced due diligence measures proportionate to the risks arising from the jurisdiction – which lists the Republic of the Union of Myanmar.

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• Regarding the list of Jurisdictions Under Increased Monitoring:
• Since June 2022, the progress of 20 jurisdictions has been assessed, and their respective statements have been updated;
• Gibraltar decided to defer its report, so for this jurisdiction, the FATF statements from June 2022 were included in this document, but they may not reflect the current state of its money laundering and terrorist financing prevention regime;
• Three new jurisdictions were identified and included: the Democratic Republic of Congo, the Republic of Mozambique, and the United Republic of Tanzania;
• It is noted the exit of the Islamic Republic of Pakistan and the Republic of Nicaragua.
• In addition, it is important to note the additional measures adopted by the FATF regarding the Russian Federation, which can be consulted here: https://www.fatf-gafi.org/publications/fatf-general/documents/outcomes-fatf-plenary-october-2022.html

II. COMPARATIVE FRAMEWORK WITH COMMUNICATIONS ISSUED BY THE FATF IN JUNE 2022

HIGH-RISK JURISDICTIONS SUBJECT TO A CALL FOR ACTION | JURISDICTIONS UNDER INCREASED MONITORING JURISDICTIONS SUBJECT TO THE APPLICATION OF COUNTERMEASURES | JURISDICTIONS SUBJECT TO THE APPLICATION OF ENHANCED MEASURES | JURISDICTIONS SUBJECT TO A MONITORING PROCESS | JURISDICTIONS THAT LEFT THE MONITORING PROCESS

PLENARY MEETING 20-21 OCTOBER 2022
Democratic People's Republic of Korea (North Korea) | Islamic Republic of Iran; Republic of the Union of Myanmar | Barbados, Burkina Faso, United Arab Emirates, Gibraltar, Cayman Islands, Jamaica, Kingdom of Cambodia, Hashemite Kingdom of Jordan, Kingdom of Morocco, Republic of Albania, Syrian Arab Republic, Democratic Republic of Congo, Republic of the Philippines, Republic of Haiti, Republic of Yemen, Republic of Mali, Republic of Mozambique, Republic of Panama, Republic of Senegal, Republic of South Sudan, Republic of Turkey, Republic of Uganda; United Republic of Tanzania | Islamic Republic of Pakistan; Republic of Nicaragua

PLENARY MEETING 14-17 JUNE 2022
Democratic People's Republic of Korea (North Korea) | Islamic Republic of Iran | -- | Barbados, Burkina Faso, United Arab Emirates, Gibraltar, Cayman Islands, Jamaica, Kingdom of Cambodia, Hashemite Kingdom of Jordan, Kingdom of Morocco, Republic of Albania, Syrian Arab Republic, Republic of the Philippines, Republic of Haiti, Republic of Yemen, Islamic Republic of Pakistan, Republic of Mali, Republic of Nicaragua, Republic of Panama, Republic of Senegal, Republic of South Sudan, Republic of Turkey, Republic of Uganda, Republic of the Union of Myanmar | Republic of Malta

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III. PROCEDURES AND MEASURES TO BE ADOPTED BY INSTITUTIONS
In view of the content of the documents produced by the FATF and within the framework of the duty to disseminate information to which supervisory authorities are bound (Article 120 of Law No. 83/2017, of August 18 - "Law No. 83/2017"), the Bank of Portugal informs the following, regarding business relationships, occasional transactions, and operations carried out with persons, entities, and collective interest centers without legal personality1 residing or established in the jurisdictions identified below:
a. Considering the existence of a very high risk of money laundering, terrorist financing, and proliferation of weapons of mass destruction, it is determined, under the terms and for the purposes of paragraph 1(b) of Article 99 of Law No. 83/2017, the adoption of countermeasures, proportionate to those risks, regarding the DEMOCRATIC PEOPLE'S REPUBLIC OF KOREA (NORTH KOREA) and the ISLAMIC REPUBLIC OF IRAN, which must in any case include the countermeasures identified in paragraphs (f) to (h) and (k) of paragraph 3 of Article 99 of the aforementioned Law No. 83/2017. b. Enhanced identification and due diligence measures shall continue to be adopted, under paragraph 2 of Article 36 and paragraph 3(b) of Article 37 of the aforementioned Law No. 83/2017, and examined with special care, all business relationships, occasional transactions, and operations involving the DEMOCRATIC PEOPLE'S REPUBLIC OF KOREA (NORTH KOREA) or the ISLAMIC REPUBLIC OF IRAN – necessarily including the measures specified in the High-Risk Jurisdictions Subject to a Call For Action –, as well as the REPUBLIC OF THE UNION OF MYANMAR.
c. Regarding business relationships, occasional transactions, and operations involving jurisdictions subject to a monitoring process, or other high-risk third countries that are part of Delegated Regulation (EU) 2016/1675 of the Commission, of July 14, 2016, in its currently valid version2, enhanced measures that are proportionate to the risk concretely identified must be adopted, without prejudice to the above, under paragraph 2 of Article 36, and paragraph 1 and paragraph 3(b) of Article 37, all of the aforementioned Law No. 83/2017.
*
Supplementary information on the conclusions of the FATF plenary meeting can be obtained on the website www.fatf-gafi.org.

1 Including their representatives and beneficial owners.
2 The consolidated version of Delegated Regulation (EU) 2016/1675 can be consulted at https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02016R1675-20220313, although this does not dispense with consulting the binding versions published in the Official Journal of the European Union.