Circular Letter No. CC/2024/00000010: Disclosure of FATF Communications (February 2024 Plenary Meeting)

Circular Letter No. CC/2024/00000010
Sent to:
Credit Institutions, Financial Companies, Payment Institutions, and Electronic Money Institutions.
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Subject: Disclosure of FATF communications (February 2024 plenary meeting)

I. COMMUNICATIONS ISSUED BY THE FATF

With the aim of protecting the international financial system from 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 February 21 and 23, 2024, the FATF published the following documents:

a. HIGH-RISK JURISDICTIONS SUBJECT TO A CALL FOR ACTION, dated February 23, 2024, which identifies jurisdictions subject to countermeasures and jurisdictions with strategic deficiencies in preventing money laundering and terrorist financing 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/content/fatf-gafi/en/publications/High-risk-and-other-monitored-jurisdictions/Call-for-action-february-2024.html

b. JURISDICTIONS UNDER INCREASED MONITORING, dated February 23, 2024, 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/en/publications/High-risk-and-other-monitored-jurisdictions/Increased-monitoring-february-2024.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, due to 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 FATF reiterates its call for the application of countermeasures regarding these two jurisdictions, highlighting an increased risk of proliferation financing (“Given heightened proliferation financing risks, the FATF reiterates its call to apply countermeasures on these high-risk 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 arising from them, and the FATF has updated its communication regarding the same.

• Regarding the list of Jurisdictions Under Increased Monitoring:

  • The FATF evaluated the progress of 18 jurisdictions, and their respective statements have been updated;
  • Regarding the Republic of Cameroon, Republic of Haiti, Syrian Arab Republic, Socialist Republic of Vietnam, and Republic of Yemen, previous FATF statements were included in this document, but they may not reflect the current state of their respective money laundering prevention and terrorist financing regimes;
  • Two new jurisdictions were identified and included: Republic of Kenya and Republic of Namibia;
  • It is noted the exit of four jurisdictions: Barbados, Gibraltar, Republic of Uganda, and United Arab Emirates.

In addition, it is important to note the publication of a new communication regarding the Russian Federation – the full content of which can be consulted at: https://www.fatf-gafi.org/en/publications/Fatf-general/fatf-statement-russian-federation-feb-2024.html – and the maintenance of the suspension of its membership status.

II. COMPARATIVE FRAMEWORK WITH COMMUNICATIONS ISSUED BY THE FATF IN OCTOBER 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
21-23 FEBRUARY 2024
Democratic People's Republic of Korea (North Korea) | Islamic Republic of Iran; Republic of the Union of Myanmar | Burkina Faso, Republic of Bulgaria, Republic of Cameroon, Jamaica, Republic of Kenya, 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 Namibia, Republic of Senegal, Socialist Republic of Vietnam, Republic of South Sudan, Republic of Turkey, United Republic of Tanzania; | Barbados, Gibraltar, Republic of Uganda, United Arab Emirates

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

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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 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 paragraph 1(b) of Article 99 of Law No. 83/2024, the maintenance 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 the terms of paragraph 2 of Article 36 and paragraph 3(b) 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 – 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, shall be examined with special care.

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 effective version, enhanced measures deemed proportional to the specifically identified risk 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 regarding 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.