Circular Letter No. CC/2024/00000047

Circular Letter No. CC/2024/00000047
Sent to:
Credit Institutions, Financial Companies, Payment Institutions, Electronic Money Institutions and Entities carrying out activities with virtual assets.
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Subject: Disclosure of FATF communications (October 2024 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 23 and 25, 2024, the FATF published the following documents:
a. HIGH-RISK JURISDICTIONS SUBJECT TO A CALL FOR ACTION, dated October 25, 2024, 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-2024.html b. JURISDICTIONS UNDER INCREASED MONITORING, dated October 25, 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/content/fatf-gafi/en/publications/High-risk-and-other-monitored-jurisdictions/increased-monitoring-october-2024.html

Regarding these documents, the following should be noted:

• Regarding the list of High-Risk Jurisdictions Subject to a Call for Action:
• The FATF reiterates its call for the application of countermeasures against the Democratic People's Republic of Korea (North Korea) and the Islamic Republic of Iran, emphasizing an increased risk of proliferation financing (“Given heightened proliferation financing risks, the FATF reiterates its call to apply countermeasures on these high-risk jurisdictions.”), particularly vis-à-vis the Democratic People's Republic of Korea (North Korea) given the increased link between this jurisdiction and the international financial system.

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• 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 further reinforced that it will continue to monitor whether the AML/CFT activities of this Republic legitimize financial flows through the application of undue scrutiny.
• Regarding the list of Jurisdictions Under Increased Monitoring:
• Since June 2024, the FATF has assessed the progress of 16 jurisdictions, and their respective statements have been updated;
• Regarding the Republic of Haiti, the Republic of Kenya, the Principality of Monaco, the Syrian Arab Republic and the Bolivarian Republic of Venezuela, the FATF's previous statements have been included in this document, but these may not reflect the current state of their respective money laundering and terrorist financing prevention regimes;
• Four new jurisdictions have been identified and included: the People's Democratic Republic of Algeria, the Republic of Angola, the Republic of Côte d'Ivoire and the Lebanese Republic;
• It should be noted the exit of one jurisdiction: the Republic of Senegal.

In addition, it is important to note the continued maintenance of the suspension of the membership status of the Russian Federation.

II. COMPARATIVE FRAMEWORK WITH COMMUNICATIONS ISSUED BY THE FATF IN JUNE 2024

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 23-25 OCTOBER 2024 | Democratic People's Republic of Korea (North Korea) | Islamic Republic of Iran; Republic of the Union of Myanmar | People's Democratic Republic of Algeria, Republic of Angola, Burkina Faso, Republic of Bulgaria, Republic of Cameroon, Republic of Croatia, Democratic Republic of the Congo, Republic of Côte d'Ivoire, Republic of Haiti, Lebanese Republic, Republic of Kenya, Republic of Mali, Republic of Mozambique, Republic of Namibia, Federal Republic of Nigeria, Republic of the Philippines, Republic of South Africa, Republic of South Sudan, Syrian Arab Republic, United Republic of Tanzania, Socialist Republic of Vietnam, Republic of Yemen, Bolivarian Republic of Venezuela and Principality of Monaco; | Republic of Senegal PLenary MEETING 26-28 JUNE 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, Republic of Croatia, Democratic Republic of the Congo, Republic of Haiti, Republic of Kenya, Republic of Mali, Republic of Mozambique, Republic of Namibia, Federal Republic of Nigeria, Republic of the Philippines, Republic of Senegal, Republic of South Africa, Republic of South Sudan, Syrian Arab Republic, United Republic of Tanzania, Socialist Republic of Vietnam, Republic of Yemen, Bolivarian Republic of Venezuela and Principality of Monaco; | Jamaica and Republic of Turkey

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III. PROCEDURES AND MEASURES TO BE ADOPTED BY INSTITUTIONS
Given 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(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, which must in any case include the countermeasures identified in paragraphs (f) to (h) and (k) of paragraph 3 of Article 99 of said 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 said 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 prove proportional to the specifically identified risk must be adopted, without prejudice to the above determined, under the provisions of paragraph 2 of Article 36, and paragraph 1 and paragraph 3(b) of Article 37, all of said 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.