Circular No. 20 High-Risk Countries and Enhanced Follow-Up Countries

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Palestine Monetary Authority

Circular No. (20/2025)
To all banks operating in Palestine
Date: Thursday, February 27, 2025

Subject: High-Risk Countries and Enhanced Follow-Up Countries

Attached is a copy of the decision issued by the Financial Follow-Up Unit No. (2025/1) dated February 23, 2025, concerning High-Risk Countries and Enhanced Follow-Up Countries according to the list issued by the Financial Action Task Force (FATF). Accordingly, legal measures are requested to implement the requirements of the aforementioned decision and the relevant measures, with emphasis on compliance with the following:

1. Taking into account concerns regarding deficiencies in Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) systems in countries classified on the "Grey List" (Enhanced Follow-Up Countries), when conducting and updating self-assessments of AML/CFT risks.
2. Applying the Risk-Based Approach (RBA), such that the application of due diligence measures is proportional to (risk analysis results, nature of financial transactions, customer risks, and country classifications), with enhanced due diligence measures to be applied when high risks are identified.

Supervisory Group
Palestine Monetary Authority

Copy to: The Honorable Financial Follow-Up Unit

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Financial Follow-Up Unit
State of Palestine

Financial Follow-Up Unit
State of Palestine

Decision No. (2025/1)
Issued by the Financial Follow-Up Unit
Date: February 23, 2025

Concerning the Lists of High-Risk Countries and Enhanced Follow-Up Countries

Based on the provisions of Decision-Law No. (39) of 2022 concerning Anti-Money Laundering and Counter-Terrorist Financing and its amendments, particularly Article (20) and paragraphs (3, 4) of Article (30), and based on the National AML/CFT Committee Decision No. (8/J/2016) dated December 1, 2016, regarding the delegation to the Financial Follow-Up Unit to publish the list of high-risk countries issued periodically by the Financial Action Task Force (FATF), and subsequently as determined by the Group from February 21, 2020, to February 21, 2025, and further to the National AML/CFT Committee Decision No. (T/2020/5) dated February 24, 2020, concerning High-Risk and Enhanced Follow-Up Countries, and subsequently to the Financial Follow-Up Unit Decision No. (2020/1) dated February 25, 2025, and its subsequent decisions concerning the lists of High-Risk and Enhanced Follow-Up Countries. Based on public interest requirements, it is decided as follows:

First
High-Risk Countries List (Black List)
All financial institutions and specified non-financial businesses and professions in the State of Palestine must continue to apply the following measures regarding high-risk countries:

Country	Required Measures Regarding Countries
Democratic People's Republic of Korea (North Korea).	1. Applying targeted financial sanctions in accordance with the provisions of Executive Decree No. (14/2022) concerning the implementation of Security Council resolutions. ; 2. Giving special attention to commercial relations and transactions with those countries, including companies and financial institutions, and applying the following countermeasures:
Islamic Republic of Iran (Iran).	a. Applying enhanced due diligence measures to business relations and operations with those countries (as part of countermeasures), in proportion to the risks arising therein, according to Articles (26, 27) of National Committee Instructions No. (4) of 2022 for financial institutions, and Articles (24, 25) of National Committee Instructions No. (3) of 2022 for specified non-financial businesses and professions.

b. Applying the enhanced due diligence measures referred to in paragraph (a) of this item when dealing with any entity acting on behalf of a natural or legal person, including companies or financial institutions operating in those countries.
c. Enhancing the reporting mechanisms adopted by the financial institution or specified non-financial business/profession, including increasing staff cooperation and expediting data provision to the AML/CFT compliance officer within the institution, to ensure that no transaction suspected of involving money laundering or its predicate offences, or terrorist financing, is executed, and notifying the Unit immediately without delay with all data related to attempting to conclude those transactions, while ensuring reporting confidentiality and not notifying the client.
d. Not establishing branches, representative offices, or subsidiaries in those countries. e. Not relying on third parties located in those countries when taking any due diligence measures regarding clients. f. Not establishing any banking correspondent relationships or similar correspondent relationships with financial institutions in those countries.

Country

Required Measures Regarding Countries

Republic of the Union of Myanmar (Myanmar).

1. Applying enhanced due diligence measures to business relations and operations with Myanmar, in proportion to the risks arising in the country, according to Articles (26, 27) of National Committee Instructions No. (4) of 2022 for financial institutions, and Articles (25, 24) of National Committee Instructions No. (3) of 2022 for specified non-financial businesses and professions. ; 2. When applying enhanced due diligence measures, it must be ensured that humanitarian aid flows and legitimate non-profit organization activities and financial transfers are not disrupted.

Second
Enhanced Follow-Up Countries List (Grey List) The list of Enhanced Follow-Up Countries (Grey List) stipulated in the Unit's Decision No. (2024/3) is amended by adding both the Lao People's Democratic Republic (Lao) and the Federal Democratic Republic of Nepal (Nepal), and removing the Republic of the Philippines, so that the list becomes as shown in the table below, taking into account concerns regarding deficiencies in AML/CFT systems for these countries (according to the annex attached to this decision) when conducting self-assessments of AML/CFT risks, including identifying, analyzing, and evaluating those risks.

No.	Country Name	No.	Country Name
1	Algeria	14	Monaco
2	Angola	15	Republic of Mozambique
3	Bulgaria	16	Republic of Namibia
4	Burkina Faso	17	Federal Democratic Republic of Nepal (Nepal)
5	Cameroon	18	Republic of Nigeria
6	Côte d'Ivoire (Ivory Coast)	19	Republic of South Africa
7	Croatia	20	Republic of South Sudan
8	Democratic Republic of the Congo	21	Arab Republic of Syria (Syria)
9	Republic of Haiti	22	Republic of Tanzania
10	Republic of Kenya	23	Venezuela
11	Lao People's Democratic Republic (Lao)	24	Vietnam
12	Republic of Lebanon	25	Yemeni Republic (Yemen)
13	Republic of Mali

Third
Implementation
All financial institutions and specified non-financial businesses and professions must implement the provisions of this decision, which shall take effect from the date of its circulation.

Director of the Financial Follow-Up Unit
Dr. Firas Marar
[Signature and Seal]

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Concerning Deficiencies in Anti-Money Laundering and Counter-Terrorist Financing Systems

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Attached to Financial Follow-Up Unit Decision No. (2025/1) Concerning the lists of High-Risk Countries and Enhanced Follow-Up Countries

Concerns Regarding Deficiencies in AML/CFT Systems in Countries

• Part 1: Deficiencies through Evaluation Reports (for all countries):
  This section explains how to access concerns regarding AML/CFT and Proliferation Financing (PF) systems for countries listed on the Grey List, as well as all other countries subject to mutual evaluation by FATF or peer groups. These concerns can be accessed by reviewing the relevant Mutual Evaluation Reports (MERs) and subsequent follow-up reports.
  The published MERs and follow-up reports on the websites of FATF or MENAFATF contain all deficiencies and key conclusions regarding AML/CFT systems for countries on the Enhanced Follow-Up list and other evaluated countries, which can be obtained via the following mechanism:

a. Accessing MERs in English (for all countries).

1. Visit the website: www.fatf-gafi.org
2. From the Topics menu, select Mutual Evaluations.
3. Select Reports under Mutual Evaluations.
4. Search for the country name in English using the search window shown in the adjacent figure.

b. Accessing MERs in Arabic (for countries evaluated by MENAFATF).

1. Visit the website: www.menafatf.org/ar
2. Select the Mutual Evaluation section, then (Evaluation Reports - Second Round of Evaluation), or follow-up reports.
3. Select the report from the list appearing by country name.

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Attached to Financial Follow-Up Unit Decision No. (2025/1) Concerning the lists of High-Risk Countries and Enhanced Follow-Up Countries

• Part 2: Implementation of Action Plans to Address Deficiencies
  Countries on the Grey List have made high-level political commitments to address strategic deficiencies in AML/CFT systems, and these countries continue to implement their obligations to resolve remaining deficiencies.
  The following items outline the core areas these countries are addressing or have addressed, based on identified deficiencies according to MERs and follow-up reports, which must be considered whether negative or positive:

Country	Core Areas
Algeria	(Statement from October 2024) In October 2024, Algeria made a high-level political commitment to work with the FATF and MENAFATF to strengthen the effectiveness of its AML/CFT regime. Since the adoption of its mutual evaluation report (MER) in May 2023, Algeria has made progress on many of the MER's recommended actions including by more effectively pursuing money laundering investigations and prosecutions. Algeria will continue to work with FATF to implement its action plan by: (1) improving risk-based supervision, especially for higher risk sectors, including through the adoption of new procedures, risk assessments, supervision manuals and guidelines, as well as undertaking inspections and applying effective, proportionate and dissuasive sanctions; (2) developing an effective framework for basic and beneficial ownership information; (3) enhancing its regime for suspicious transaction reports; (4) establishing an effective legal and institutional framework for targeted financial sanctions for terrorism financing; and (5) implementing a risk-based approach to oversight of non-profit organisations, without disrupting or discouraging legitimate activity.
Angola	(Statement from October 2024) In October 2024, Angola made a high-level political commitment to work with the FATF and ESAAMLG to strengthen the effectiveness of its AML/CFT regime. Since the adoption of its MER in June 2023, Angola has made progress on some of the MER's recommended actions including enhancing national cooperation and coordination, international cooperation and the use of financial intelligence by competent authorities. Angola will continue to work with the FATF to implement its FATF action plan by: (1) enhancing its understanding of ML/TF risks; (2) improving risk-based supervision of non-financial banking entities and DNFBPs; (3) ensuring competent authorities have adequate, accurate and timely access to beneficial ownership information and that breaches to obligations are adequately addressed; (4) demonstrating an increase in ML investigations and prosecutions; (5) demonstrating the ability to identify, investigate and prosecute TF; and (6) demonstrating an effective process to implement targeted financial sanctions without delay.

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Attached to Financial Follow-Up Unit Decision No. (2025/1) Concerning the lists of High-Risk Countries and Enhanced Follow-Up Countries

Country	Core Areas
Bulgaria	Since October 2023, when Bulgaria made a high-level political commitment to work with the FATF and MONEYVAL to strengthen the effectiveness of its AML/CFT regime, Bulgaria has taken steps towards improving its AML/CFT regime, including by ensuring that the beneficial ownership information held in its Register is accurate and up-to-date and by identifying the subset of non-profit organisations (NPOs) most vulnerable to TF abuse. Bulgaria should continue to work on implementing its action plan to address its strategic deficiencies, including by: (1) addressing the remaining technical compliance deficiencies; (2) improving investigations and prosecutions of different types of money laundering in line with risks, including high-scale corruption and organised crime; (3) ensuring the ability to conduct parallel financial investigations in all terrorism investigations; (4) addressing gaps in the PF TFS frameworks; and (5) demonstrating initial implementation of risk-based monitoring of NPOs to prevent abuse for TF purposes.
Burkina Faso	In February 2021, Burkina Faso made a high-level political commitment to work with the FATF and GIABA to strengthen the effectiveness of its AML/CFT regime, Burkina Faso should continue to work on implementing its action plan to address its remaining strategic deficiency, by implementing an effective targeted financial sanctions regime related to TF and PF. The FATF notes Burkina Faso's continued progress across its action plan, however all deadlines have expired and work remains. The FATF urges Burkina Faso to swiftly implement its action plan to address the above-mentioned strategic deficiency as soon as possible as all deadlines expired in December 2022.
Cameroon	In June 2023, Cameroon made a high-level political commitment to work with the FATF and GABAC to strengthen the effectiveness of its AML/CFT regime, Cameroon has taken steps to improve its AML/CFT regime by aligning AML/CFT national strategies and policies with the findings of the NRA; demonstrating AML/CFT cooperation and coordination between competent authorities; improving risk based prioritisation of incoming international cooperation, and establishing a regime for violations of transparency obligations applicable to legal persons. Cameroon should continue working on implementing its action plan to address its strategic deficiencies, including by: (1) enhancing risk-based supervision of banks and implementing effective risk-based supervision for non-bank FIs and DNFBPs, and conducting appropriate outreach to high-risk FIs and DNFBPs; (2) maintaining and ensuring timely access by competent authorities to adequate and up to date beneficial ownership information on legal persons; (3) enhancing secure information exchange between the FIU, reporting entities and competent authorities and demonstrating an increase in dissemination of intelligence reports to support operational needs of competent authorities; (4) demonstrating that authorities are able to conduct a range of ML investigations, and prosecute ML in line with risks; (5) implementing policies and procedures for seizing and confiscating proceeds and instrumentalities of crime and managing frozen, seized and confiscated property, and prioritising seizure and confiscation of assets at the border; (6) demonstrating that TF investigations and prosecutions are pursued in line with risk; and (7) demonstrating effective implementation of TF and PF TFS regimes and implementing a risk-based approach to NPOs without disrupting legitimate NPO activities.
Côte d'Ivoire	(Statement from October 2024) In October 2024, Côte d'Ivoire made a high-level political commitment to work with the FATF and GIABA to strengthen the effectiveness of its AML/CFT regime. Since the adoption of its MER in June 2023, Côte d'Ivoire has made significant progress on many of the MER's recommended actions including by strengthening its legal AML/CFT framework through several important legislative and regulatory amendments, updating ML/TF analysis by drafting typology reports on the highest risk predicate offences, strengthening the human and technical resources of the FIU and prosecutors, and operationalising the agency in charge of the management of assets seized and confiscated. Côte d'Ivoire will continue to work with the FATF to implement its FATF action plan by: (1) enhancing its use of international cooperation in ML/TF investigations and prosecutions; (2) improving the implementation of risk-based supervision of financial institutions and designated non-financial businesses and professions and conducting outreach campaigns to improve compliance; (3) improving the verification and access of basic and beneficial ownership information of legal persons and applying sanctions in case of violation; (4) enhancing the use of financial intelligence by law enforcement authorities and improving disseminations by the FIU; (5) demonstrating a sustained increase in the number of ML and TF investigations and prosecutions of different types in line with the country's risk profile; and (6) strengthening the targeted financial sanctions framework.
Croatia	In June 2023, Croatia made a high-level political commitment to work with the FATF and MONEYVAL to strengthen the effectiveness of its AML/CFT regime. At its February 2025 Plenary, the FATF made the initial determination that Croatia has substantially completed its action plan and warrants an on-site assessment to verify that the implementation of AML/CFT reforms has begun and is being sustained, and that the necessary political commitment remains in place to sustain implementation in the future. Croatia has made the following key reforms: (1) completing the national risk assessment, including assessing the ML/TF risk associated with the misuse of legal persons and legal arrangements and the use of cash in the real estate sector; (2) increasing FIU human resources and improving analytical capabilities; (3) continuing to improve LEA detection, investigation and prosecution of different types of ML, including ML involving foreign predicate offences and the misuse of legal persons; (4) demonstrating a sustained increase in the application of provisional measures in securing direct/indirect proceeds, as well as foreign proceeds subject to confiscation; (5) demonstrating the ability to systematically detect and where relevant investigate TF in line with its risk profile; (6) establishing a national framework for the implementation of UN TFS measures and providing guidance and conducting outreach and training to reporting entities; and (7) identifying the subset of NPOs most vulnerable to TF abuse and providing targeted outreach to NPOs and to the donor community on potential vulnerabilities of NPOs to TF abuse.
DEMOCRATIC REPUBLIC OF THE CONGO	Since October 2022, when the DRC made a high-level political commitment to work with the FATF and GABAC to strengthen the effectiveness of its AML/CFT regime, the DRC has taken steps towards improving its AML/CFT regime, including by establishing a mechanism to promote interagency coordination and cooperation on both ML and TF at the operational level. The DRC should continue to work to implement its FATF action plan to address its strategic deficiencies, including by: (1) developing and implementing a risk-based supervision plan; (2) building the capacity of the FIU to conduct operational and strategic analysis; (3) strengthening the capabilities of authorities involved in the investigation and prosecution of ML and TF; and (4) demonstrating effective implementation of TF and PF-related TFS.
Haiti	(Statement from June 2024) Since June 2021, when Haiti made a high-level political commitment to work with the FATF and CFATF to strengthen the effectiveness of its AML/CFT regime, Haiti has taken steps towards improving its AML/CFT regime, including improving the FIU's access to and use of a wide range of information in its financial intelligence products through the adoption of a new organic law. The FATF recognises the political commitment expressed at a high level and the efforts demonstrated by Haiti to advance its commitments in the midst of the challenging social, economic and security situation within the country. Haiti should continue to work on implementing its action plan to address its strategic deficiencies, including by: (1) completing its ML/TF risk assessment process and disseminating the findings; (2) implementing risk-based supervision for all financial institutions and DNFBPs deemed to constitute a higher ML/TF risk; (3) ensuring basic and beneficial ownership information are maintained and accessible in a timely manner; (4) ensuring the FIU has adequate resources and processes to produce and disseminate operational and strategic analysis to competent authorities for combatting ML and TF; (4) demonstrating authorities are identifying, investigating and prosecuting ML cases in a manner consistent with Haiti's risk profile; (5) demonstrating an increase of identification, tracing and recovery of proceeds of crimes; (6) addressing the technical deficiencies in its targeted financial sanctions regime; and (7) conducting appropriate risk-based monitoring of NPOs vulnerable to TF abuse without disrupting or discouraging legitimate NPO activities. The FATF notes Haiti's continued progress across its action plan, however all deadlines are expired and work remains. The FATF encourages Haiti to continue to implement its action plan to address the above-mentioned strategic deficiencies.
Kenya	Since February 2024, when Kenya made a high-level political commitment to work with the FATF and ESAAMLG to strengthen the effectiveness of its AML/CFT regime, Kenya has taken steps towards improving its AML/CFT regime, including by completing a TF risk assessment and by bringing its TFS framework related to proliferation financing into compliance. Kenya should continue to work to implement its FATF action plan to address its strategic deficiencies, including by:(1) presenting the results of the NRA and other risk assessments in a consistent manner to competent authorities and the private sector and updating the national AML/CFT strategies; (2) improving risk-based AML/CFT supervision of FIs and DNFBPs and adopting a legal framework for the licensing and supervision of VASPs; (3) enhancing the understanding of preventive measures by FIs and DNFBPs, including to increase STR filing and implement TFS without delay; (4) designating an authority for the regulation of trusts and collection of accurate and up-to-date beneficial ownership information and implementing remedial actions for breaches of compliance with transparency requirements for legal persons and arrangements; (5) improving the use and quality of financial intelligence products; (6) increasing ML and TF investigations and prosecutions in line with risks; (7) bringing the TFS framework in compliance with R.6 and ensure its effective implementation; and (8) revising the framework for NPO regulation and oversight to ensure that mitigating measures are risk-based and do not disrupt or discourage legitimate NPO activity.
Lao PDR	In February 2025, Lao PDR made a high-level political commitment to work with the FATF and APG to strengthen the effectiveness of its AML/CFT regime. Since the adoption of its MER in August 2023, Lao PDR has made progress on some of the MER's recommended actions including increasing FIU resources and eliminating bearer shares. Lao PDR will continue to work with the FATF to implement its FATF action plan by: (1) enhancing its understanding of ML/TF risks; (2) improving risk-based supervision of casinos, banks and reporting entities in SEZs, including fit and proper checks; (3) enhancing the quality and quantity of financial intelligence analysis and spontaneous dissemination to law enforcement agencies; (4) ensuring law enforcement agencies receive training and guidance on money laundering; (5) demonstrating an increase in ML investigations and prosecutions in line with Lao PDR's risk profile.