Circular Letter No. CC/2021/00000020

Circular Letter No. CC/2021/00000020
Sent to:
Credit Institutions, Financial Companies, Payment Institutions, and Electronic Money Institutions.
Subject: Disclosure of FATF communications (plenary meeting of February 2021)

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 money laundering and terrorist financing prevention and to develop coordinated and decisive responses worldwide to combat these realities.

Following the plenary meeting held on February 22, 24, and 25, 2021, the FATF released the following documents:
a. HIGH-RISK JURISDICTIONS SUBJECT TO A CALL FOR ACTION, dated February 25, 2021, which identifies jurisdictions subject to countermeasures and jurisdictions with strategic deficiencies in money laundering and terrorist financing prevention that have not 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-february-2021.html b. JURISDICTIONS UNDER INCREASED MONITORING, dated February 25, 2021, which identifies jurisdictions with strategic deficiencies in money laundering and terrorist financing prevention 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: http://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/increased-monitoring-february-2021.html

Regarding these documents, it is necessary to clarify that:

• Since February 2020, given the impact generated by the pandemic caused by the new Coronavirus (SARS-CoV-2), also known as COVID-19, the FATF has paused its processes for reviewing jurisdictions listed in the 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.
• However, in October 2020, the FATF decided to resume its work of identifying new jurisdictions with strategic deficiencies in money laundering and terrorist financing prevention and to prioritize the review of jurisdictions included in the Jurisdictions Under Increased Monitoring list with expired or expiring deadlines. In this context:
• The progress of 11 jurisdictions was assessed, and their respective declarations were updated;
• Four new jurisdictions were identified and included in this list;
• The remaining jurisdictions on this list were given the option to submit/not submit a report within the scope of this meeting. Barbados and Jamaica decided to defer their report - given the impact generated by the pandemic - so for these, the FATF declarations from February 2020 were included in this document, which may not reflect the current state of their respective money laundering and terrorist financing prevention regimes.
• It should be noted the exit of the Bahamas from this list, as communicated by the FATF in December 2020, which can be consulted at: http://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/bahamas-delisting-2020.html

II. COMPARATIVE FRAMEWORK WITH COMMUNICATIONS ISSUED BY THE FATF IN OCTOBER 2020

1 Jurisdiction ceased to appear on this list in December 2020, according to a FATF communication which can be consulted at: http://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/bahamas-delisting-2020.html

HIGH-RISK JURISDICTIONS SUBJECT TO A CALL FOR ACTION | JURISDICTIONS UNDER INCREASED MONITORING JURISDICTIONS SUBJECT TO THE APPLICATION OF COUNTERMEASURES | JURISDICTIONS SUBJECT TO SPECIAL RISK ASSESSMENT ASSOCIATED WITH THEM | JURISDICTIONS SUBJECT TO A MONITORING PROCESS | JURISDICTIONS THAT LEFT THE MONITORING PROCESS PLenary MEETING 22, 24 AND 25 FEBRUARY 2021 | Democratic People's Republic of Korea (North Korea) | Islamic Republic of Iran | -- | Barbados, Burkina Faso, Cayman Islands, Jamaica, Myanmar, Kingdom of Cambodia, Kingdom of Morocco, 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 Senegal, Republic of Uganda, Republic of Zimbabwe | -- PLenary MEETING 23 OCTOBER 2020 | Democratic People's Republic of Korea (North Korea) | Islamic Republic of Iran | -- | Barbados, Commonwealth of the Bahamas 1, 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

Mod. 40000375/T – 01/14

III. PROCEDURES AND MEASURES TO BE ADOPTED BY INSTITUTIONS
Considering the content of the documents produced by the FATF and within the scope 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 centers of collective interest without legal personality 2 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 b) of paragraph 1 of Article 99 of Law No. 83/2017, the adoption of countermeasures, proportional 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 b) of paragraph 3 of Article 37 of the aforementioned Law No. 83/2017, and all business relationships, occasional transactions, and operations involving the DEMOCRATIC PEOPLE'S REPUBLIC OF KOREA (NORTH KOREA) or the ISLAMIC REPUBLIC OF IRAN shall be examined with special care, 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 third countries of high risk that are part of Delegated Regulation (EU) 2016/1675 of the Commission, of July 14, 2016, in its current version 3, enhanced measures that are proportional to the risk concretely identified must be adopted, without prejudice to the above, under the provisions of paragraph 2 of Article 36, and paragraph 1 and paragraph 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%3A02016R1675-20210207, although this does not dispense with consulting the binding versions published in the Official Journal of the European Union.