Circular Letter No. CC/2020/00000074

Circular Letter No. CC/2020/00000074
Sent to:
Credit Institutions, Payment Institutions, Electronic Money Institutions and Financial Companies.
Mod. 99999924/T – 01/14
Subject: Disclosure of FATF communications (October 2020 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 that present strategic deficiencies in matters of money laundering and terrorist financing and to develop, at a global level, coordinated and decisive responses to combat these realities.

Following its plenary meeting on October 23, 2020, the FATF released the following documents:
a. HIGH-RISK JURISDICTIONS SUBJECT TO A CALL FOR ACTION, dated October 23, 2020, 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: https://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/call-for-action-october-2020.html b. JURISDICTIONS UNDER INCREASED MONITORING, dated October 23, 2020, 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-2020.html

Regarding these documents, it is necessary to clarify that:

• On August 2, 2020, the FATF decided to pause its review processes aimed at compiling the list of High-Risk Jurisdictions Subject To A Call For Action, which is why the document indicated above refers to the content of the February 2020 communication.
• The FATF left it to the discretion of the jurisdictions on the list of Jurisdictions Under Increased Monitoring to present/not present a report within the framework of this meeting - taking into account the impact generated by the pandemic caused by the new Coronavirus (SARS-CoV-2), also known as COVID-19 -, having updated their declarations only

Mod. 99999924/T – 01/14 regarding the jurisdictions that opted to report. It should also be noted the exit of Iceland and Mongolia from this list.

II. COMPARATIVE FRAMEWORK WITH COMMUNICATIONS ISSUED BY THE FATF IN FEBRUARY 20201

1 Unchanged in June 2020, cf. Circular Letter No. CC/2020/00000054.

HIGH-RISK JURISDICTIONS SUBJECT TO A CALL FOR ACTION JURISDICTIONS SUBJECT TO THE APPLICATION OF COUNTERMEASURES

JURISDICTIONS UNDER INCREASED MONITORING
JURISDICTIONS SUBJECT TO A SPECIAL ASSESSMENT OF THE RISKS ASSOCIATED WITH THEM JURISDICTIONS SUBJECT TO A MONITORING PROCESS JURISDICTIONS THAT LEFT THE MONITORING PROCESS

PLENARY MEETING
23 OCTOBER 2020
Democratic People's Republic of Korea (North Korea) Islamic Republic of Iran -- Barbados, Commonwealth of the Bahamas, Jamaica, Myanmar, Kingdom of Cambodia, Republic of Albania, Syrian Arab Republic, Republic of Botswana, Republic of Ghana, Republic of Yemen, Islamic Republic of Pakistan, Republic of Mauritius, Republic of Nicaragua, Republic of Panama, Republic of Uganda, Republic of Zimbabwe Iceland, Mongolia

PLENARY MEETING
19 TO 21 FEBRUARY
2020
Democratic People's Republic of Korea (North Korea) Islamic Republic of Iran -- Barbados, Commonwealth of the Bahamas, Iceland, Jamaica, Myanmar, Mongolia, Kingdom of Cambodia, Republic of Albania, Syrian Arab Republic, Republic of Botswana, Republic of Ghana, Republic of Yemen, Islamic Republic of Pakistan, Republic of Mauritius, Republic of Nicaragua, Republic of Panama, Republic of Uganda, Republic of Zimbabwe Republic of Trinidad and Tobago

III. PROCEDURES AND MEASURES TO BE ADOPTED BY INSTITUTIONS

Taking into account 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 personality2 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, letter 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, and which must in any case include the countermeasures identified in letters f) to h) and k) of paragraph 3 of Article 99 of the aforementioned Law No. 83/2017. b. Enhanced identification and diligence measures shall continue to be adopted, under paragraph 2 of Article 36 and letter b) of paragraph 3 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.
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 current version3, enhanced measures that prove proportionate to the concretely identified risk must be adopted, without prejudice to the above determined, under the provisions of paragraph 2 of Article 36, paragraph 1 and letter b) of paragraph 3 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.

2 Including their respective representatives and beneficial owners.
3 The consolidated version of Delegated Regulation (EU) 2016/1675 can be consulted at https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02016R1675-20201001#M4-1, although it does not dispense with consulting the binding versions published in the Official Journal of the European Union.