Circular Letter No. 02/2024, dated 20 March

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CIRCULAR LETTER NO. 02/2024
SUBJECT: FINANCIAL SYSTEM

• Disclosure of Measures by the Financial Action Task Force (FATF)

Considering the need to protect the international financial system from risks associated with Money Laundering, Terrorist Financing, and Proliferation of Weapons of Mass Destruction, the Financial Action Task Force (FATF) held a plenary session from 21 to 23 February 2024, with the objective of defining prevention and interruption policies for financial flows that underpin crime and terrorism. It is important to highlight the disclosure of the following documents:

1. HIGH-RISK JURISDICTIONS SUBJECT TO THE APPLICATION OF COUNTERMEASURES
   The document identifies jurisdictions subject to countermeasures and those with strategic deficiencies in Money Laundering/Terrorist Financing (ML/TF) prevention, which have not yet made sufficient progress to address these deficiencies and/or have not agreed with the FATF on an action plan for this purpose. On the other hand, the list of high-risk jurisdictions subject to countermeasures remains unchanged since the plenary session held in February 2020. The Countries subject to countermeasures are indicated on the FATF website and can be consulted via the following link: https://www.fatf-gafi.org/en/publications/High-risk-and-other-monitored-jurisdictions/Call-for-action-february-2024.html, namely: Democratic People's Republic of Korea (North Korea), Islamic Republic of Iran.

CONTINUATION OF CIRCULAR LETTER NO. 02/2024 page 2 of 5
2. JURISDICTIONS SUBJECT TO A SPECIAL ASSESSMENT OF ASSOCIATED RISKS
A new category has been included, which can be consulted at the link: https://www.fatf-gafi.org/en/publications/High-risk-and-other-monitored-jurisdictions/Call-for-action-february-2024.html, which lists the Union of Myanmar.

3. JURISDICTIONS UNDER CONTINUOUS MONITORING
   The document identifies jurisdictions with strategic deficiencies in ML/TF that have developed an action plan to address them and are subject to a monitoring process by the FATF. This does not call for the application of enhanced due diligence measures to the jurisdictions in question; however, it encourages all jurisdictions to consider the status of the countries listed here when conducting their risk analyses. The Countries included in the situation described in this point, also known as the Grey List, as well as the status of their systems for preventing and combating money laundering, terrorist financing, and proliferation of weapons of mass destruction, are indicated on the FATF website and can be consulted via the following link: https://www.fatf-gafi.org/en/publications/High-risk-and-other-monitored-jurisdictions/Increased-monitoring-february-2024.html, namely: Burkina Faso, Haiti, Yemen, Jamaica, Mali, Philippines, Senegal, South Sudan, Syria, Turkey, Mozambique, Tanzania, Democratic Republic of the Congo, South Africa, Nigeria, Cameroon, Croatia, Vietnam, Kenya, and Namibia.

4. JURISDICTIONS THAT HAVE CEASED TO BE SUBJECT TO CONTINUOUS FATF MONITORING.
   The document identifies jurisdictions that, having fulfilled their action plan, have been removed from the so-called "Grey List", ceasing to be under quarterly monitoring by the FATF. The Countries included in the situation described in this point are indicated on the FATF website and can be consulted via the following link: https://www.fatf-gafi.org/en/publications/High-risk-and-other-monitored-jurisdictions/Increased-monitoring-february-2024.html, namely: Barbados, Gibraltar, Uganda, and United Arab Emirates.

5. PROCEDURES AND MEASURES ADOPTED BY FINANCIAL INSTITUTIONS
   Taking into account the content of the documents produced by the FATF and within the framework of the information dissemination duty to which supervisory authorities are bound under Article 55 of Law No. 5/20, dated 27 January – (Law on the Prevention and Combating of Money Laundering, Terrorist Financing, and Proliferation of Weapons of Mass Destruction), the Bank of Angola hereby directs the following:

a) To Countries or Jurisdictions in the situation described in number 1 of this circular letter and indicated on the FATF website:
i) Considering the existence of a very high risk of money laundering, terrorist financing, and proliferation of weapons of mass destruction, it is determined, in accordance with Article 28(2) of Law No. 5/20 dated 27 January, the adoption of countermeasures proportional to those risks; ii) The countermeasures to be applied by Financial Institutions may include, among others, the following:
a. Limit business relationships or financial operations with the identified country or persons in those countries; apply specific elements of enhanced due diligence measures; b. Strengthen existing communication or information transmission mechanisms, notably through the request for additional information;
c. Introduce relevant reporting mechanisms or declarations of atypical financial transactions;
d. Condition the establishment of subsidiaries, branches, representative offices, or other establishments on compliance with additional requirements; e. Prohibit the establishment of branches or representative offices in countries subject to countermeasures, or otherwise consider that the branch or representative office in question is located in a country that lacks adequate ML/TF/P mechanisms; f. Limit business relationships or operations with a given territory or persons from that territory; g. Prohibit the use of third parties located in a given territory, even when that territory is not qualified as a high-risk third country; h. Oblige Institutions to review, modify, or, if necessary, terminate correspondent relationships with entities from a given territory;
i. Strengthen supervisory procedures for branches and subsidiaries of entities headquartered in a given territory;
j. Strengthen group supervisory procedures regarding their branches and subsidiaries located in a given territory; k. Strengthen risk management and audit procedures of entities operating in a given territory; and
l. Limit business relationships or financial operations with the identified countries or persons in those countries.

b) Enhanced due diligence measures, in accordance with Article 28(1) of Law No. 5/20 dated 27 January, shall be adapted and carefully examined for all business relationships, occasional transactions, and operations involving the Union of Myanmar; c) If deemed insufficient, enhanced due diligence measures applied or to be applied may lead to the decision not to initiate or to terminate business relationships or transactions; d) To Countries or Jurisdictions in the situation described in point 3 of this circular letter and indicated on the FATF website, enhanced due diligence measures shall be applied that are proportional to the specifically identified risk, in accordance with Article 14 of Law No. 5/20 dated 27 January.

Supplementary information regarding the conclusions of the FATF Plenary Meeting may be obtained on the official FATF website at the following link: https://www.fatf-gafi.org/en/publications/Fatfgeneral/outcomes-fatf-plenary-february-2024.html

6. This Circular Letter enters into force on the date of its publication.
   Luanda, 20 March 2024.
   DEPARTMENT OF FINANCIAL CONDUCT

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Osvaldo Manuel Pedro dos Santos
-Director-