Circular Letter No. CC/2023/00000044

Circular Letter No. CC/2023/00000044
Sent to:
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Credit Institutions, Financial Companies, Payment Institutions and Electronic Money Institutions.
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Subject: Disclosure of FATF communications (October 2023 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 the plenary meeting held between October 25 and 27, 2023, the FATF released the following documents:
a. HIGH-RISK JURISDICTIONS SUBJECT TO A CALL FOR ACTION, dated October 27, 2023, 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/content/fatf-gafi/en/publications/High-risk-and-other-monitored-jurisdictions/Call-for-action-october-2023.html b. JURISDICTIONS UNDER INCREASED MONITORING, dated October 27, 2023, 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/content/fatf-gafi/en/publications/High-risk-and-other-monitored-jurisdictions/Increased-monitoring-october-2023.html

Regarding these documents, the following should be noted:

• Regarding the list of High-Risk Jurisdictions Subject to a Call for Action:
• Since February 2020, the FATF has paused the evaluation process for the Democratic People's Republic of Korea (North Korea) and the Islamic Republic of Iran, in light of the COVID-19 pandemic crisis and considering that these two jurisdictions were already subject to the application of countermeasures; therefore, the aforementioned document refers to the content of the February 2020 communication regarding these two jurisdictions;
• The Republic of the Union of Myanmar remains in the category of jurisdictions subject to the application of enhanced identification and due diligence measures proportional to the risks resulting from them, and the FATF has updated its communication regarding the same.
• Regarding the list of Jurisdictions Under Increased Monitoring:
• The FATF assessed the progress of 21 jurisdictions, and their respective statements have been updated;

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• Regarding the Republic of Cameroon, the Syrian Arab Republic, the Republic of Croatia, the Socialist Republic of Vietnam and the Republic of Yemen, the previous FATF statements were included in this document, but they may not reflect the current state of their respective money laundering and terrorist financing prevention regimes;
• A new jurisdiction has been identified and included: the Republic of Bulgaria;
• It is noted that four jurisdictions have exited: the Republic of Albania; the Cayman Islands; the Hashemite Kingdom of Jordan; and the Republic of Panama.

In addition, it is important to note:

• The maintenance of the suspension of the membership status of the Russian Federation;
• That the FATF granted member status to the Republic of Indonesia (40th member).

II. COMPARATIVE FRAMEWORK WITH COMMUNICATIONS ISSUED BY THE FATF IN JUNE 2023

HIGH-RISK JURISDICTIONS SUBJECT TO A CALL FOR ACTION	JURISDICTIONS UNDER INCREASED MONITORING
JURISDICTIONS SUBJECT TO THE APPLICATION OF COUNTERMEASURES	JURISDICTIONS SUBJECT TO THE APPLICATION OF ENHANCED MEASURES	JURISDICTIONS SUBJECT TO A MONITORING PROCESS	JURISDICTIONS THAT EXITED THE MONITORING PROCESS
PLENARY MEETING 25-27 OCTOBER 2023	Democratic People's Republic of Korea (North Korea)	Islamic Republic of Iran; Republic of the Union of Myanmar	Barbados, Burkina Faso, Republic of Bulgaria, Republic of Cameroon, United Arab Emirates, Gibraltar, Jamaica, Republic of South Africa, Syrian Arab Republic, Republic of Croatia, Democratic Republic of the Congo, Federal Republic of Nigeria, Republic of the Philippines, Republic of Haiti, Republic of Yemen, Republic of Mali, Republic of Mozambique, Republic of Senegal, Socialist Republic of Vietnam, Republic of South Sudan, Republic of Turkey, Republic of Uganda; United Republic of Tanzania	Republic of Albania, Cayman Islands, Hashemite Kingdom of Jordan, Republic of Panama
PLENARY MEETING 21-23 JUNE 2023	Democratic People's Republic of Korea (North Korea)	Islamic Republic of Iran; Republic of the Union of Myanmar	Barbados, Burkina Faso, United Arab Emirates, Gibraltar, Cayman Islands, Jamaica, Hashemite Kingdom of Jordan, Republic of South Africa, Republic of Albania, Syrian Arab Republic, Republic of Cameroon, Republic of Croatia, Democratic Republic of the Congo, Federal Republic of Nigeria, Republic of the Philippines, Republic of Haiti, Republic of Yemen, Republic of Mali, Republic of Mozambique, Republic of Panama, Republic of Senegal, Socialist Republic of Vietnam, Republic of South Sudan, Republic of Turkey, Republic of Uganda; United Republic of Tanzania	--

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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 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, letter b) of Article 99 of Law No. 83/2017, the maintenance of countermeasures, proportional 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 due diligence measures shall continue to be adopted, under the terms of 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 –, as well as the REPUBLIC OF THE UNION OF MYANMAR.
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 currently valid version, 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, paragraph 1 and letter b) of paragraph 3 of Article 37, all of the aforementioned Law No. 83/2017.
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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.