BSP Circular on FATF Publications Regarding High-Risk Jurisdictions and Increased Monitoring dated 25 October 2024

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OFFICE OF THE DEPUTY GOVERNOR I FINANCIAL SUPERVISION SECTOR

CIRCULAR LETTER NO. CL-2024-____
To : All BSP-Supervised Financial Institutions (BSFIs) Subject : Financial Action Task Force (FATF) Publications ñ 25 October 2024 This is to inform all BSFIs of the Financial Action Task Force (FATF) publications issued last 25 October 2024 on: (i) high-risk jurisdictions subject to a call for action1 , (ii) jurisdictions under increased monitoring2 ; and (iii) statement on the Russian Federation3 .

1. High Risk Jurisdictions subject to a Call for Action
   For all countries identified as high risk, the FATF calls on all members and urges all jurisdictions to apply enhanced due diligence, and in the most serious cases, apply countermeasures to protect the international financial system from the money laundering, terrorist financing, and proliferation financing (ML/TF/PF) risks emanating from the country. Given heightened PF risks, the FATF reiterates its call to apply countermeasures on these high-risk jurisdictions.

• Jurisdictions subject to a FATF call on its members and other jurisdictions to apply
  countermeasures a. Democratic Peopleís Republic of Korea (DPRK) ñ The FATF has continually reiterated since 2011 the need for all countries to robustly implement the targeted financial sanctions (TFS) in accordance with United Nations Security Council (UNSC) Resolutions and apply the following countermeasures to protect their financial systems from the ML/TF/PF threat emanating from DPRK: (i) terminate correspondent relationships with DPRK banks; (ii) close any subsidiaries or branches of DPRK banks in their countries; and (iii) limit business relationships and financial transactions with DPRK persons. The FATF also urges countries to adequately assess and account for the increased PF risk with the greater financial connectivity reported, particularly since the next round of assessments requires countries to adequately assess PF risks under Recommendation 1 and Immediate Outcome 11. b. Iran ñ The FATF fully lifts the suspension of countermeasures and calls on its members and urges all jurisdictions to apply effective countermeasures against Iran, in line with Recommendation 194 . Until Iran implements the measures required to address the deficiencies identified with respect to countering terrorism-financing in its Action Plan, the FATF will remain concerned with the TF risk emanating from Iran and the threat this poses to the international financial system. 1 previously called ìPublic Statementî; often externally referred to as the ìblacklistî; (Except for Myanmar, FATF Statement remains unchanged since June 2024: https://www.fatf-gafi.org/en/publications/High-risk-and￾other-monitored-jurisdictions/Call-for-action-october-2024.html 2 previously called ìImproving Global AML/CFT Compliance: On-going processî; often externally referred as the ìgrey listî; https://www.fatf-gafi.org/en/publications/High-risk-and-other-monitored-jurisdictions/increased￾monitoring-october-2024.html 3 Outcomes FATF Plenary, 23-25 October 2024:
  https://www.fatf-gafi.org/en/publications/Fatfgeneral/outcomes-fatf-plenary-october-2024.html The suspension of the Russian Federation continues to stand (see February 2024 statement: https://www.fatf￾gafi.org/en/publications/Fatfgeneral/fatf-statement-russian-federation-feb-2024.html) 4 The Interpretative Note to Recommendation 19 specifies examples of the countermeasures that could be undertaken by countries.

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• Jurisdiction subject to a FATF call on its members and other jurisdictions to apply
  enhanced due diligence (EDD) measures proportionate to the risks arising from the jurisdiction Myanmar The FATF calls on its members and other jurisdictions to apply EDD measures proportionate to the risk arising from Myanmar. The FATF requires that as part of EDD, financial institutions should increase the degree and nature of monitoring of the business relationship, in order to determine whether those transactions or activities appear unusual or suspicious. When applying EDD measures, countries should ensure that flows of funds for humanitarian assistance, legitimate Non-Profit Organization (NPO) activity and remittances are neither disrupted nor discouraged.

2. Jurisdictions under Increased Monitoring
   These countries are actively working with the FATF and have committed to resolve swiftly the identified strategic deficiencies in their regimes to counter ML/TF/PF within agreed timeframes. At its October 2024 plenary, the FATF has removed Senegal from the list of countries under increased monitoring following successful on-site visit. Meanwhile, FATF made the initial determination that the Philippines has substantially completed its action plan and warrants an on-site assessment to verify that the implementation of anti-money laundering/countering the financing of terrorism (AML/CFT) reforms has begun and is being sustained, and that the necessary political commitment remains in place to sustain implementation in the future. New jurisdictions added to the list are Algeria, Angola, CÙte d'Ivoire and Lebanon. The FATF does not call for the application of EDD measures on these jurisdictions but encourages its members and all jurisdictions to take into account the information presented in their risk analysis.

3. Statement on Russian Federation
   The suspension of the membership of the Russian Federation continues to stand. FATF members note with concern the potential risks to the international financial system, including growing financial connectivity of Russia with countries subject to FATF countermeasures, risks of proliferation financing, and malicious cyber activities and ransomware attacks. Copies of the aforementioned FATF publications may be viewed and downloaded from the FATF website (www.fatf-gafi.org). BSFIs are likewise directed to regularly refer to the FATFís website for the latest statements on high risk and other monitored jurisdictions and consider the same in their risk analysis and mitigation strategies. For guidance and strict compliance. LYN I. JAVIER Sector-in-Charge __ October 2024 Digitally signed by Lyn I. Javier Date:
   2024.10.30
   17:29:54 +08'00'
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