Circular Letter No. CC/2021/00000046

Circular Letter No. CC/2021/00000046
Sent to:
Credit Institutions, Financial Companies, Payment Institutions, and Electronic Money Institutions.
Subject: Disclosure of FATF communications (June 2021 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 promoting 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 between June 21 and 25, 2021, the FATF released the following documents:
a. HIGH-RISK JURISDICTIONS SUBJECT TO A CALL FOR ACTION, dated June 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: https://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/call-for-action-june-2021.html

b. JURISDICTIONS UNDER INCREASED MONITORING, dated June 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: https://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/increased-monitoring-june-2021.htmlhttp://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/increased-monitoring-february-2021.html

Regarding these documents, it should be clarified that:

• The review process of the jurisdictions listed in the High-Risk Jurisdictions Subject To A Call for Action was conditioned by pandemic restrictions, which is why the document indicated above refers to the content of the February 2020 communication.
• However, in October 2020, work to identify new jurisdictions with strategic deficiencies in money laundering and terrorist financing prevention was resumed, prioritizing the review of jurisdictions included in the Jurisdictions Under Increased Monitoring list based on the pending deadline. In this regard:
• Since February 2021, the progress of 15 jurisdictions has been assessed, and their statements have been updated;
• Four new jurisdictions have been identified and included in this list, and the exit of the Republic of Ghana is also noted;

Burkina Faso and the Republic of Senegal decided to postpone their reporting - taking into account the impact generated by the pandemic -, so for these, the statements from the February 2021 FATF communication were included in this document, which may not reflect the current state of their respective money laundering and terrorist financing prevention regimes.

BANCO DE PORTUGAL
Headquarters: Rua do Comércio, 148 • 1100-150 Lisbon • Portugal T +351 213 130 000 • www.bportugal.pt Tax ID: 500792771 • Share Capital: € 1,000,000 • Registration at the Lisbon Commercial Registry, No. 51 Form 99999924/T – 01/14

Circular Letter No. CC/2021/00000046
II. COMPARATIVE FRAMEWORK WITH COMMUNICATIONS ISSUED BY THE FATF IN FEBRUARY 2021

HIGH-RISK JURISDICTIONS SUBJECT TO A CALL FOR ACTION | JURISDICTIONS UNDER INCREASED MONITORING JURISDICTIONS SUBJECT TO THE APPLICATION OF COUNTERMEASURES | 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
21-25 JUNE 2021
Democratic People's Republic of Korea (North Korea) Islamic Republic of Iran -- Barbados, Burkina Faso, Cayman Islands, Jamaica, Kingdom of Cambodia, Kingdom of Morocco, Republic of Albania, Syrian Arab Republic, Republic of Botswana, Republic of the Philippines, Republic of Haiti, Republic of Yemen, Islamic Republic of Pakistan, Republic of Malta, Republic of Mauritius, Republic of Nicaragua, Republic of Panama, Republic of Senegal, Republic of South Sudan, Republic of Uganda, Republic of the Union of Myanmar, Republic of Zimbabwe Republic of Ghana

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, 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 the Union of Myanmar, Republic of Zimbabwe --

Circular Letter No. CC/2021/00000046
III. PROCEDURES AND MEASURES TO BE ADOPTED BY INSTITUTIONS
Taking into account 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 Banco de Portugal informs the following, regarding business relationships, occasional transactions, and operations carried out with persons, entities, and centers of collective interest 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, 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 diligence measures, in accordance with paragraph 2 of Article 36 and paragraph 3(b) of Article 37 of the aforementioned Law No. 83/2017, shall continue to be adopted, 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 high-risk third countries that are part of Delegated Regulation (EU) 2016/1675 of the Commission, of July 14, 2016, in its current version2, enhanced measures that prove 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 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%3A02016R1675-20210207, although this does not dispense with consulting the binding versions published in the Official Journal of the European Union.