Circular Letter No. CC/2021/00000059

Circular Letter No. CC/2021/00000059
Sent to:
Credit Institutions, Financial Companies, Payment Institutions and Electronic Money Institutions.
Subject: Disclosure of FATF communications (October 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 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 between October 19 and 21, 2021, the FATF released the following documents:
a. HIGH-RISK JURISDICTIONS SUBJECT TO A CALL FOR ACTION, dated October 21, 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-october-2021.html b. JURISDICTIONS UNDER INCREASED MONITORING, dated October 21, 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-october-2021.html

Regarding these documents, the following should be noted:

• The revision process of the High-Risk Jurisdictions Subject to a Call for Action list was conditioned by pandemic restrictions, which is why the document indicated above refers to the content of the February 2020 communication.
• Regarding the list of Jurisdictions Under Increased Monitoring:
  • Since June 2021, the progress of 17 jurisdictions has been assessed, and their respective statements have been updated;
  • Burkina Faso, the Republic of Haiti, and the Republic of South Sudan decided to defer their reporting - taking into account the impact generated by the pandemic - so, regarding these, the FATF statements from February and June 2021 were included in this document, which may not reflect the current state of their respective money laundering and terrorist financing prevention regimes;
  • Three new jurisdictions were identified and included, namely, the Hashemite Kingdom of Jordan, the Republic of Mali, and the Republic of Turkey;
  • It is also worth noting the exit of the Republic of Botswana and the Republic of Mauritius.

II. COMPARATIVE FRAMEWORK WITH COMMUNICATIONS ISSUED BY THE FATF IN JUNE 2021

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 19-21 OCTOBER 2021 | Democratic People's Republic of Korea (North Korea) Islamic Republic of Iran | -- | Barbados, Burkina Faso, Cayman Islands, Jamaica, Kingdom of Cambodia, Hashemite Kingdom of Jordan, Kingdom of Morocco, Republic of Albania, Syrian Arab Republic, Republic of the Philippines, Republic of Haiti, Republic of Yemen, Islamic Republic of Pakistan, Republic of Mali, Republic of Malta, Republic of Nicaragua, Republic of Panama, Republic of Senegal, Republic of South Sudan, Republic of Turkey, Republic of Uganda, Union of Myanmar, Republic of Zimbabwe | Republic of Botswana Republic of Mauritius 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, Union of Myanmar, Republic of Zimbabwe | Republic of Ghana

III. PROCEDURES AND MEASURES TO BE ADOPTED BY INSTITUTIONS
Given 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 collective interest centers 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 Article 99(1)(b) 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, which must in any case include the countermeasures identified in Article 99(3)(f) to (h) and (k) of the aforementioned Law No. 83/2017. b. Enhanced identification and due diligence measures shall continue to be adopted, under Article 36(2) and Article 37(3)(b) 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 the 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 version2, enhanced measures that prove proportionate to the risk concretely identified must be adopted, without prejudice to the above, under Article 36(2), Article 37(1), and Article 37(3)(b), 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 respective 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.