CVM Circular Letter CVM/SMI/SIN 03/2012

CIRCULAR LETTER/CVM/SMI/SIN/Nº 003/2012
Rio de Janeiro, August 31, 2012.
Subject: Communications published by FATF.

To the Responsible Directors of CVM Instruction No. 301, of April 16, 1999,

1. With a view to the faithful compliance with CVM Instruction No. 301/99, in particular, the provisions of item VIII, of article 6, and item I of § 1, of the same article,
   we inform you that on June 22, 2012, the Financial Action Task Force (FATF), in plenary meeting, approved and published communications whose versions in Portuguese and disseminated on the electronic address of the Financial Activities Control Council (Coaf), https://www.coaf.fazenda.gov.br/, we transcribe below:

"...The Financial Action Task Force (FATF) is the body that establishes global standards in the field of prevention and combating of money laundering and terrorist financing (AML/CFT). To protect the international financial system from risks and encourage greater observance of AML/CFT standards, the FATF identified jurisdictions that have strategic deficiencies to, together with them, address such deficiencies that put the international financial system at risk.
Jurisdictions subject to FATF designation for its members and other jurisdictions to apply countermeasures to protect the international financial system from current and substantial risks of money laundering and terrorist financing (ML/TF), originating from the jurisdictions.
Iran
Democratic People's Republic of Korea (DPRK)
Jurisdictions with strategic AML/CFT deficiencies that have not achieved the expected progress in addressing the deficiencies or that have not committed to an action plan developed together with the FATF to address the deficiencies.
The FATF alerts its members to the risks associated with the deficiencies of each jurisdiction, as described below.
Bolivia
Cuba
Ecuador
Ethiopia
Ghana
Indonesia
Kenya *
Myanmar *
Nigeria
Pakistan
Sao Tome and Principe
Sri Lanka
Syria
Tanzania
Thailand
Turkey*
Vietnam
Yemen

• These jurisdictions have not achieved the expected progress since their inclusion in the Public Statement of June 2011. If such jurisdictions do not implement significant actions by October 2012, the FATF will call on its members to apply countermeasures proportional to the risks associated with each jurisdiction.

Iran
The FATF is particularly and exceptionally concerned about Iran's failure to address the risk of terrorist financing and the serious threat this represents to the integrity of the international financial system, despite Iran's involvement with the FATF.
The FATF reiterates the appeal to its members and urges all jurisdictions to direct their financial institutions to pay special attention to relations and commercial operations with Iran, including Iranian companies and financial institutions. In addition to enhanced analysis, the FATF reiterates the appeal of February 25, 2009, made to its members, and urges all jurisdictions to apply effective countermeasures to protect their financial sectors from the risks of money laundering and terrorist financing (ML/TF) emanating from Iran. The FATF continues to alert jurisdictions to protect themselves from correspondent relationships used to avoid or circumvent countermeasures and risk mitigation practices, consider ML/TF risks when analyzing requests from Iranian financial institutions to open branches or subsidiaries in their jurisdiction. Due to the continuing threat of terrorist financing coming from Iran, jurisdictions should consider measures already adopted and possible additional safeguards, or the strengthening of existing ones. The FATF urges Iran to address its ML/TF deficiencies immediately and significantly, particularly by criminalizing terrorist financing and implementing requirements for reporting unusual transactions (RUT). If Iran does not take concrete measures to improve its AML/CFT regime, the FATF may appeal to its members and all jurisdictions to reinforce countermeasures in October 2012.

Democratic People's Republic of Korea (DPRK)
The FATF remains concerned about the DPRK's failure to address the major deficiencies in its anti-money laundering and counter-terrorist financing (AML/CFT) regime and the serious threat this poses to the integrity of the international financial system. The FATF urges the DPRK to address its AML/CFT deficiencies seriously and immediately.
The FATF reiterates its request of February 25, 2011 and asks its members and all jurisdictions to direct their financial institutions to pay greater attention to relations and commercial operations with the DPRK, as well as with companies and financial institutions of the DPRK. In addition to enhanced analysis, the FATF asks all jurisdictions to apply effective countermeasures that protect their financial sectors from the risk of money laundering and terrorist financing (ML/TF) that arise from the DPRK. Jurisdictions must also protect themselves from correspondent relationships used to avoid or circumvent countermeasures and risk mitigation practices, and consider ML/TF risks when analyzing requests from DPRK financial institutions to open branches or subsidiaries in their jurisdiction. The FATF recognizes the latest appeal of the DPRK to the FATF and remains prepared to assist the DPRK directly in addressing its AML/CFT deficiencies. ---------------------------------------------------------------------------------------------

Bolivia
Despite Bolivia's political commitment to work with the FATF and the FATF Regional Body for South America (GAFISUD) to address its strategic AML/CFT deficiencies, Bolivia has not achieved the expected progress in implementing its action plan and some strategic deficiencies remain. Bolivia must continue to work to address these deficiencies, including: (1) ensuring the adequate criminalization of money laundering; (2) adequately criminalizing terrorist financing; (3) establishing and implementing an adequate legal system for the identification and freezing of terrorist assets; and (4) establishing a fully operational Financial Intelligence Unit. The FATF encourages Bolivia to address its pending deficiencies, especially the approval of amendments to the AML/CFT law that are being considered by Parliament, and to continue the process of implementing its action plan.

Cuba
The FATF has identified that Cuba has strategic AML/CFT deficiencies that pose a risk to the international financial system. Since February 2012, Cuba has officially engaged with the FATF and participated in meetings of GAFISUD and the FATF Regional Body for the Caribbean (GAFIC). The FATF requests that Cuba continue its engagement with the FATF and work with this body to develop and agree on an action plan to implement an AML/CFT regime in accordance with international standards.

Ecuador
Ecuador has taken measures to improve its AML/CFT regime, including issuing AML supervision standards for financial institutions. Despite Ecuador's political commitment to work with the FATF and GAFISUD to address its strategic AML/CFT deficiencies, Ecuador has not achieved the expected progress in implementing its action plan within the established deadlines and some strategic deficiencies remain. Ecuador must continue to work with the FATF and GAFISUD to implement its action plan and address the deficiencies, including approving legislation on combating terrorist financing recently submitted to Parliament and: (1) ensuring the adequate criminalization of terrorist financing; (2) establishing and implementing adequate procedures to identify and freeze terrorist assets; (3) implementing adequate procedures for the confiscation of funds related to money laundering; and (4) strengthening the coordination of financial sector supervision. The FATF encourages Ecuador to address its pending deficiencies and continue the process of implementing its action plan.

Ethiopia
Despite the high-level political commitment of Ethiopia to work with the FATF to address its AML/CFT deficiencies, Ethiopia has not progressed enough in implementing its action plan and some deficiencies remain. Ethiopia must address these deficiencies: (1) adequately criminalizing money laundering and terrorist financing (Recommendation 1 and Special Recommendation II); (2) establishing and implementing adequate procedures to identify and freeze terrorist funds; (3) ensuring a fully operational and effective Financial Intelligence Unit; (4) implementing effective, proportionate and dissuasive sanctions to deal with natural and legal persons who fail to comply with national AML/CFT requirements. The FATF encourages Ethiopia to address the deficiencies and continue the process of implementing its action plan.

Ghana
Despite the high-level political commitment of Ghana to work with the FATF and the Inter-Governmental Action Group against Money Laundering in West Africa (GIABA) to address its AML/CFT deficiencies, Ghana has not progressed enough in implementing its action plan and some deficiencies remain. Ghana must continue to work to implement its action plan and address the deficiencies, including: (1) adequately criminalizing money laundering and terrorist financing; (2) ensuring a fully operational Financial Intelligence Unit that is effectively functioning; and (3) establishing and implementing adequate procedures to identify and freeze terrorist funds. The FATF encourages Ghana to address the deficiencies and continue the process of implementing its action plan.

Indonesia
Indonesia continues to improve its AML/CFT regime since the approval of AML legislation in 2010 and the submission of a bill to combat terrorist financing to Parliament for discussion in a committee. However, despite the high political commitment to work in partnership with the FATF and the Asia/Pacific Group on Money Laundering (APG) to address its strategic AML/CFT deficiencies, Indonesia has not satisfactorily implemented its action plan, and some strategic AML/CFT deficiencies remain. Indonesia must address these deficiencies: (1) adequately criminalizing terrorist financing; (2) establishing and implementing an adequate legal framework that can identify and block terrorist funds; and (3) modifying and implementing laws or other legal instruments to fully implement the International Convention for the Suppression of the Financing of Terrorism of 1999. The FATF encourages Indonesia to address existing deficiencies and proceed with the process of implementing its action plan.

Kenya*
Despite the high-level political commitment of Kenya to work with the FATF and the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) to address its AML/CFT deficiencies, Kenya has not progressed enough in implementing its action plan and some deficiencies remain. Kenya must address these deficiencies, including: (1) adequately criminalizing terrorist financing; (2) ensuring a fully operational and effective Financial Intelligence Unit; (3) establishing and implementing an adequate legal framework that can identify and block terrorist funds; (4) implementing effective, proportionate and dissuasive sanctions to deal with natural and legal persons who fail to comply with national AML/CFT requirements; (5) implementing an adequate and effective AML/CFT supervision program for the entire financial sector; (6) strengthening financial transparency; (7) improving and expanding CDD measures; and (8) establishing adequate record-keeping obligations. Given Kenya's continued lack of progress, particularly in approving legislation to combat terrorist financing, if Kenya does not adopt significant measures by October 2012, the FATF will call on its members to apply countermeasures proportional to the risks associated with this country.

Myanmar*
Despite the high-level political commitment of Myanmar to work with the FATF and the APG to address its AML/CFT deficiencies, Myanmar has not progressed enough in implementing its action plan and some deficiencies remain. Myanmar must address these deficiencies, including: (1) adequately criminalizing terrorist financing; (2) establishing and implementing adequate procedures to identify and freeze terrorist funds; (3) strengthening the extradition regime related to terrorist financing; (4) ensuring a fully operational and effective Financial Intelligence Unit; (5) strengthening financial transparency; and (6) strengthening CDD measures. The FATF encourages Myanmar to address existing deficiencies and proceed with the process of implementing its action plan.

Nigeria
Despite the high-level political commitment of Nigeria to work with the FATF and GIABA to address its AML/CFT deficiencies, Nigeria has not progressed enough in implementing its action plan and some deficiencies remain. Kenya must address these deficiencies has taken measures to improve its AML/CFT regime, including resolving pending issues on the criminalization of money laundering and terrorist financing. The FATF encourages Nigeria to address its existing deficiencies and continue the process of implementing its action plan.

Pakistan
Pakistan has made significant progress in improving its AML/CFT regime, including strengthening the capacity of its Financial Intelligence Unit, issuing the 2012 Order for the Application of United Nations Security Council Resolutions, AML/CFT guidelines for money service businesses and a currency declaration notification for the implementation of cross-border cash controls. However, despite the high-level political commitment of Pakistan to work with the FATF and the APG to address its strategic AML/CFT deficiencies, Pakistan has not progressed enough in implementing its action plan and some deficiencies remain. Specifically, Pakistan needs to approve legislation that ensures the country is in compliance with FATF standards regarding the crime of terrorist financing and the ability to identify, freeze and confiscate terrorist assets. The FATF encourages Pakistan to address existing deficiencies and continue the implementation of its action plan.

Sao Tome and Principe
Despite the high-level political commitment of Sao Tome and Principe to work with the FATF and GIABA to address its strategic AML/CFT deficiencies, Sao Tome and Principe has not progressed enough in implementing its action plan and some deficiencies remain. Sao Tome and Principe must address these deficiencies, including: (1) adequately criminalizing money laundering and terrorist financing; (2) establishing a fully operational Financial Intelligence Unit that functions effectively; (3) ensuring that financial institutions and DNFBPs are subject to adequate regulation and supervision; and (4) implementing effective, proportionate and dissuasive sanctions to deal with non-compliance with national AML/CFT obligations. The FATF encourages Sao Tome and Principe to address existing deficiencies and continue with the process of implementing its action plan.

Sri Lanka
Sri Lanka has made significant progress in improving its AML/CFT regime, including issuing regulations to establish freezing procedures to implement United Nations Security Council Resolutions 1267 and 1373. However, despite the high-level political commitment of Sri Lanka to work with the FATF and the APG to address its strategic AML/CFT deficiencies, Sri Lanka has not progressed enough in implementing its action plan. Sri Lanka must continue working to address the pending issue regarding the adequate criminalization of terrorist financing. The FATF encourages Sri Lanka to address this pending deficiency and proceed with the process of implementing its action plan.

Syria
Previously, Syria took measures to improve its AML/CFT regime. However, despite the high-level political commitment of Syria to work with the FATF and the Middle East and North Africa FATF (MENAFATF), greater commitment from Syria is needed to clarify whether existing deficiencies have been addressed, including: (1) implementing adequate procedures to identify and block terrorist funds; (2) ensuring that financial institutions are aware of and comply with their obligations to report suspicious transactions of money laundering and terrorist financing and (3) ensuring that there are appropriate laws and procedures to provide mutual legal assistance. The FATF encourages Syria to demonstrate that deficiencies have been addressed to allow the FATF to adequately assess the country's progress.

Tanzania
Tanzania has made significant progress in improving its AML/CFT regime. However, despite the high-level political commitment of Tanzania to work with the FATF and ESAAMLG to address its AML/CFT deficiencies, Tanzania has not made sufficient progress in implementing its action plan, and some AML/CFT deficiencies remain. Tanzania must continue working on implementing its action plan and address these deficiencies, including: (1) addressing predicate crimes for money laundering; (2) adequately criminalizing terrorist financing; (3) establishing and implementing adequate procedures to identify and block terrorist assets, as well as implementing United Nations Security Council Resolutions 1267 and 1373 through legislation, regulations or other legal means; (4) establishing effective CDD measures; (5) ensuring adequate record-keeping measures; and (6) establishing a fully operational Financial Intelligence Unit that functions effectively. The FATF encourages Tanzania to address pending deficiencies and continue the process of implementing its action plan.

Thailand
Despite the high-level political commitment of Thailand to work with the FATF and the APG to address strategic AML/CFT deficiencies, Thailand has not had sufficient progress in implementing its action plan, and some AML/CFT deficiencies remain, despite Thailand having faced external difficulties between 2009 and 2011, which had a significant impact on the legislative process that allowed the approval of laws and regulations necessary. Thailand has made progress in improving its AML/CFT regime, including conducting a complete assessment of ML/TF risks in its financial sector. Thailand must continue working to implement its action plan to address pending deficiencies, including: (1) adequately criminalizing terrorist financing; (2) establishing and implementing adequate procedures to identify and block terrorist assets; and (3) strengthening AML/CFT supervision. The FATF encourages Thailand to address pending deficiencies and continue the process of implementing its action plan, especially by approving legislation on combating terrorist financing.

Turkey*
Despite the high-level political commitment of Turkey to work with the FATF to address strategic AML/CFT deficiencies, Thailand has not had sufficient progress in implementing its action plan, and some AML/CFT deficiencies remain. Turkey must work to address these deficiencies, including: (1) adequately criminalizing terrorist financing; and (2) implementing an adequate legal regime to identify and block terrorist assets. Given the continued lack of progress in these two areas, if Turkey does not adopt significant measures by October 2012, the FATF will call on its members to apply countermeasures proportional to the risks associated with this country.

Vietnam
Vietnam has made significant progress in improving its AML/CFT regime, including issuing an Inter-Ministerial Circular on terrorist financing and revising its anti-money laundering legislation. However, despite the high-level political commitment of Vietnam to work with the FATF and the APG to address strategic AML/CFT deficiencies, Vietnam has not had sufficient progress in implementing its action plan, and some AML/CFT deficiencies remain. Vietnam must continue working with the FATF and the APG to implement its action plan and address these deficiencies, including: (1) addressing pending issues regarding the adequate criminalization of terrorist financing; (2) establishing and implementing adequate procedures to identify and freeze terrorist assets; (3) making legal persons subject to criminal liability in accordance with FATF standards or demonstrating that there is a constitutional prohibition that prevents this measure; (4) improving general reporting obligations; (5) improving and expanding customer due diligence measures and suspicious transaction reporting obligations; and (6) strengthening international cooperation. The FATF encourages Vietnam to address pending deficiencies and continue the process of implementing its action plan.

Yemen
Despite the high-level political commitment of Yemen to work with the FATF and MENAFATF to address strategic AML/CFT deficiencies, Yemen has not had sufficient progress in implementing its action plan, and some AML/CFT deficiencies remain. Yemen must continue working to implement its action plan and address these deficiencies, including: (1) adequately criminalizing money laundering and terrorist financing; (2) establishing and implementing adequate procedures to identify and freeze terrorist assets; (3) developing the supervisory and monitoring capacity of financial sector supervisory authorities and the Financial Intelligence Unit to ensure that financial institutions comply with the obligation to report suspicious transactions, especially regarding terrorist financing; and (4) ensuring a fully operational Financial Intelligence Unit that functions effectively. The FATF

Encourages Yemen to address pending deficiencies and continue the process of implementing its action plan.
--------------------------------------------------------------------------------------------- Enhancing Global AML/CFT Compliance: Ongoing Process – June 22, 2012 Rome, June 22, 2012 – As part of its current assessment of compliance with AML/CFT standards, the FATF has identified to date the following jurisdictions with strategic AML/CFT deficiencies for which an action plan has been developed in partnership with the FATF. As the situation differs from one jurisdiction to another, each jurisdiction has submitted in writing its high-level political commitment to address the identified deficiencies. The FATF encourages such commitments.

Several jurisdictions have not yet been examined by the FATF. The FATF continues to identify other jurisdictions that pose a risk to the international financial system.

The FATF and regional FATF-style bodies (FSRBs) will continue to work with the jurisdictions listed below and will communicate their progress in addressing the identified deficiencies. The FATF urges these jurisdictions to complete the implementation of the action plans efficiently and within the proposed timeframes. The FATF will monitor the implementation of these action plans and encourage its members to consider the information presented below.

Afghanistan
In June 2012, Afghanistan showed high-level political commitment to work with the FATF and the Asia-Pacific Group (APG) to address its strategic AML/CFT deficiencies. Afghanistan will work on implementing its action plan to correct these deficiencies: (1) adequately criminalizing money laundering and terrorist financing; (2) establishing and implementing adequate procedures to identify and freeze terrorist assets; (3) implementing an adequate AML/CFT supervision and inspection program for all financial sectors; (4) establishing and implementing adequate procedures for the confiscation of assets related to money laundering; (5) establishing an operational and effective Financial Intelligence Unit; and (6) establishing and implementing effective controls for cross-border cash transactions. The FATF encourages Afghanistan to address the deficiencies and proceed with the process of implementing its action plan.

Albania
In June 2012, Albania showed high-level political commitment to work with the FATF and MONEYVAL to address its strategic AML/CFT deficiencies. Albania has taken measures to improve its AML/CFT regime. The FATF, however, decided that strategic AML/CFT deficiencies remain. Albania will work on implementing its action plan to correct these deficiencies: (1) implementing adequate customer due diligence provisions; (2) establishing and implementing adequate procedures to identify and freeze terrorist assets; and (3) improving the international cooperation framework related to terrorist financing. The FATF encourages Albania to address the deficiencies and proceed with the process of implementing its action plan.

Algeria
In October 2011, Algeria showed high-level political commitment to work with the FATF and the Middle East and North Africa FATF (MENAFATF) to address its strategic AML/CFT deficiencies. The FATF is concerned that strategic AML/CFT deficiencies remain and, therefore, greater engagement from Algeria is necessary to clarify whether such deficiencies have been addressed. Algeria must continue to work on implementing its action plan: (1) adequately criminalizing terrorist financing; (2) establishing and implementing adequate procedures to identify and freeze terrorist assets; (3) strengthening and expanding customer due diligence measures; and (4) establishing a fully operational and effective Financial Intelligence Unit. The FATF encourages Algeria to address the deficiencies and proceed with the process of implementing its action plan.

Angola
In June 2010, Angola showed high-level political commitment to work with the FATF to address its strategic AML/CFT deficiencies. Since February 2012, Angola has taken measures to improve its AML/CFT regime, including ensuring the regulation of customer due diligence. The FATF has identified, however, that certain strategic AML/CFT deficiencies remain. Angola must continue to work on implementing its action plan to address these deficiencies: (1) adequately criminalizing money laundering and terrorist financing; (2) establishing a fully operational and effective Financial Intelligence Unit; and (3) establishing and implementing an adequate legal framework to identify, trace, and freeze terrorist assets without delay. The FATF encourages Angola to address the remaining deficiencies and proceed with the process of implementing its action plan.

Antigua and Barbuda
In February 2010, Antigua and Barbuda showed strong political commitment to work with the FATF and the Caribbean Financial Action Task Force (CFATF) to address its strategic AML/CFT deficiencies. The FATF identified that certain strategic AML/CFT deficiencies remain. Antigua and Barbuda must continue to work on implementing its action plan to address such deficiencies, continuing to improve the overall supervision framework and working with the Organization of Eastern Caribbean States (OECS) for this purpose. The FATF encourages Antigua and Barbuda to address the existing deficiencies and proceed with the process of implementing its action plan.

Argentina
In June 2010, Argentina showed strong political commitment to work with the FATF to address its strategic AML/CFT deficiencies. Since then, Argentina has made progress in improving its AML/CFT regime, including the implementation of a Presidential Decree that created a structure to freeze terrorist assets and resolutions from the Financial Intelligence Unit for reporting entities. The FATF has identified, however, that certain strategic AML/CFT deficiencies remain. Argentina must continue to work on implementing its action plan to address such deficiencies: (1) addressing existing deficiencies regarding the criminalization of money laundering; (2) improving adequate procedures to confiscate funds linked to money laundering and freeze terrorist assets; (3) increasing financial transparency; (4) ensuring a fully operational and effective Financial Intelligence Unit and improving suspicious transaction reporting requirements; (5) implementing an adequate AML/CFT supervision program for all financial sectors; (6) improving and expanding customer due diligence measures; and (7) establishing appropriate channels of international cooperation and ensuring their effective implementation. The FATF encourages Argentina to address the existing deficiencies and proceed with the process of implementing its action plan.

Bangladesh
In October 2010, Bangladesh showed strong political commitment to work with the FATF and the Asia-Pacific Group (APG) to address its strategic AML/CFT deficiencies. Since February 2012, Bangladesh has taken measures to improve its AML/CFT regime, including the enactment of Mutual Legal Assistance in Criminal Matters. The FATF, however, identified that certain strategic AML/CFT deficiencies remain. Bangladesh must continue to work on implementing its action plan to address such deficiencies: (1) adequately criminalizing terrorist financing; (2) establishing and implementing an adequate legal framework to identify and freeze assets belonging to terrorists; (3) creating a fully operational and effective Financial Intelligence Unit; (4) improving international cooperation; and (5) publishing guidelines for capital market intermediaries to ensure that AML/CFT obligations are respected. The FATF encourages Bangladesh to address the existing deficiencies and continue with the process of implementing its action plan.

Brunei
In June 2011, Brunei showed strong political commitment to work with the FATF and the Asia-Pacific Group (APG) to address its strategic AML/CFT deficiencies. Since February 2012, Brunei has taken measures to improve its AML/CFT regime, including the issuance of the Criminal Asset Recovery Order (CARO), 2012 and the Anti-Terrorism Order (amendment), 2012. The FATF, however, identified that certain strategic AML/CFT deficiencies remain. Brunei must continue to work on implementing its action plan to address such deficiencies: (1) establishing and implementing an adequate legal framework to identify and freeze assets belonging to terrorists; (2) ensuring a fully operational and effective Financial Intelligence Unit; and (3) enacting and implementing appropriate laws on Mutual Legal Assistance in Criminal Matters. The FATF encourages Brunei to address the existing deficiencies and continue with the process of implementing its action plan.

Cambodia
In June 2011, Cambodia showed strong political commitment to work with the FATF and the Asia-Pacific Group (APG) to address its strategic AML/CFT deficiencies. The FATF identified that certain strategic deficiencies remain. Cambodia must continue to work on implementing its action plan to address such deficiencies: (1) adequately criminalizing money laundering and terrorist financing; (2) establishing and implementing an adequate legal framework to identify and freeze assets belonging to terrorists; (3) implementing adequate procedures to confiscate funds linked to money laundering; (4) ensuring a fully operational and effective Financial Intelligence Unit; and (5) improving and implementing effective controls for cross-border cash transactions. The FATF encourages Cambodia to address the existing deficiencies and continue with the process of implementing its action plan.

Kuwait
In June 2012, Kuwait showed strong political commitment to work with the FATF and the Middle East and North Africa FATF (MENAFATF) to address its strategic AML/CFT deficiencies. Kuwait will work to implement its action plan and resolve these deficiencies, including: (1) adequately criminalizing terrorist financing; (2) implementing the 1999 International Convention for the Suppression of the Financing of Terrorism; (3) establishing and implementing adequate procedures to identify and freeze terrorist assets; (4) ensuring that adequate laws and procedures are in place to provide mutual legal assistance; (5) establishing effective customer due diligence measures; (6) ensuring a fully operational FIU that functions effectively, particularly by addressing the issue of operational autonomy; and (7) ensuring that financial institutions know and comply with their obligation to report suspicious transactions related to money laundering and terrorist financing. The FATF encourages Kuwait to address the pending deficiencies and continue the process of implementing its action plan.

Kyrgyzstan
In October 2011, Kyrgyzstan showed strong political commitment to work with the FATF and the Eurasian Group (EAG) to address its strategic AML/CFT deficiencies. Since February 2012, Kyrgyzstan has made progress in improving its AML/CFT regime, establishing an AML/CFT Commission. The FATF, however, identified that certain strategic AML/CFT deficiencies remain. Kyrgyzstan must continue to work on implementing its action plan to resolve such deficiencies: (1) adequately criminalizing money laundering and terrorist financing; (2) creating and implementing adequate procedures to identify and freeze terrorist assets; (3) establishing and implementing adequate procedures to confiscate funds linked to money laundering; (4) creating customer due diligence measures for all financial institutions; and (5) implementing an adequate and efficient AML/CFT supervision program for all financial sectors. The FATF encourages Kyrgyzstan to address the deficiencies and continue its process of implementing its action plan, specifically by promulgating necessary AML/CFT amendments.

Mongolia
In June 2011, Mongolia showed strong political commitment to work with the FATF and the Asia-Pacific Group (APG) to address its strategic AML/CFT deficiencies. Since February 2012, Mongolia has been progressing in its AML/CFT regime, including through strengthening operational coordination between the FIU and law enforcement authorities. The FATF, however, identified that strategic AML/CFT deficiencies remain. Mongolia will continue working on implementing its action plan to address such deficiencies: (1) adequately criminalizing money laundering and terrorist financing; (2) establishing and implementing an adequate legal framework to identify and freeze assets belonging to terrorists; (3) implementing adequate procedures to confiscate funds linked to money laundering; (4) establishing suspicious transaction reporting requirements; and (5) demonstrating effective regulation of financial service providers. The FATF encourages Mongolia to address the existing deficiencies and continue with the process of implementing its action plan.

Morocco
In February 2010, Morocco showed strong political commitment to work with the FATF and the Middle East and North Africa FATF (MENAFATF) to address its strategic AML/CFT deficiencies. Since then, Morocco has made progress in its AML/CFT regime, adopting amendments to expand the scope of ML and TF offenses; expanding customer due diligence requirements; and working to operationalize the FIU. However, the FATF identified that strategic AML/CFT deficiencies remain. Morocco will continue working on implementing its action plan to resolve such deficiencies, adequately criminalizing terrorist financing.

Namibia
In June 2011, Namibia showed strong political commitment to work with the FATF and the Eastern and Southern Africa Anti-Money Laundering Group (ESAAMLG) to address its strategic AML/CFT deficiencies. Namibia has adopted measures to improve its AML/CFT regime, including through the ratification of the International Convention for the Suppression of the Financing of Terrorism. However, the FATF identified that certain strategic AML/CFT deficiencies remain. Namibia will continue working on implementing its action plan to address such deficiencies: (1) adequately criminalizing terrorist financing; (2) establishing and implementing an adequate legal framework to identify and freeze assets belonging to terrorists; (3) implementing an adequate AML/CFT supervision program with sufficient competencies; (4) ensuring a fully operational and effective Financial Intelligence Unit, specifically addressing the operational autonomy of the FIU; and (5) implementing effective, proportionate, and dissuasive sanctions to deal with non-compliance with national AML/CFT requirements. The FATF encourages Namibia to address the existing deficiencies and continue with the process of implementing its action plan.

Nepal
In February 2010, Nepal showed strong political commitment to work with the FATF and the Asia-Pacific Group (APG) to address its strategic AML/CFT deficiencies. Since February 2012, Nepal has enacted Mutual Legal Assistance in Criminal Matters and Extradition Orders and issued guidelines regarding the freezing of terrorist assets and customer due diligence for financial institutions. The FATF, however, identified that certain strategic AML/CFT deficiencies remain. Nepal will continue working on implementing its action plan to address such deficiencies: (1) adequately criminalizing money laundering and terrorist financing; (2) establishing and implementing adequate procedures to identify and freeze terrorist assets; (3) implementing adequate procedures to confiscate assets linked to ML; (4) enacting and implementing appropriate mutual legal assistance laws; (5) ensuring a fully operational and effective Financial Intelligence Unit; and (6) establishing STR reporting obligations for ML and TF. The FATF encourages Nepal to resolve the existing deficiencies and continue the process of implementing its action plan.

Nicaragua
In June 2011, Nicaragua showed strong political commitment to work with the FATF and the Caribbean Financial Action Task Force (CFATF) to address its strategic AML/CFT deficiencies. The FATF, however, identified that certain strategic AML/CFT deficiencies remain. Nicaragua will continue working on implementing its action plan to address such deficiencies: (1) establishing effective customer due diligence measures and adequate record-keeping requirements, mainly for entities not regulated by the supervisory authority; (2) establishing the obligation to report adequate suspicious transaction reports for ML and TF; (3) implementing an adequate AML/CFT supervision program in all financial sectors; (4) ensuring a fully operational and effective Financial Intelligence Unit; and (5) establishing adequate procedures to identify and freeze terrorist assets. The FATF encourages Nicaragua to address the remaining deficiencies and continue with the process of implementing its action plan.

Philippines
In October 2010, the Philippines showed strong political commitment to work in partnership with the FATF and the Asia-Pacific Group (APG) to address its strategic AML/CFT deficiencies. Since February 2012, the Philippines has taken significant measures to improve its AML/CFT system, enacting one of the AML law amendments and the CFT law. The FATF, however, identified that certain strategic AML/CFT deficiencies remain. The Philippines must continue working on implementing its action plan to address such deficiencies: (1) taking additional measures for the adequate criminalization of money laundering; (2) ensuring adequate procedures to identify and freeze terrorist assets and expanding provisions to confiscate funds related to money laundering; and (3) increasing the coverage of reporting entities. The FATF encourages the Philippines to address the existing deficiencies and continue the process of implementing its action plan. The FATF gives strong support, particularly for the Philippines to enact the pending AML legislative amendments.

Sudan
In February 2010, Sudan showed strong political commitment to work in partnership with the FATF and the Middle East and North Africa FATF (MENAFATF) to address its strategic AML/CFT deficiencies. The FATF identified, however, that certain strategic AML/CFT deficiencies remain. Sudan will continue working on implementing its action plan to eliminate such deficiencies: (1) implementing adequate procedures to identify and freeze terrorist assets; (2) ensuring a fully operational and effective Financial Intelligence Unit; and (3) implementing an effective supervision program for compliance with AML/CFT measures. The FATF encourages Sudan to eliminate the existing deficiencies and proceed with the process of implementing its action plan.

Tajikistan
In June 2011, Tajikistan showed strong political commitment to work with the FATF and the Eurasian Group (EAG) to address its strategic AML/CFT deficiencies. Since February 2012, Tajikistan has taken measures to improve its AML/CFT regime, strengthening its Financial Intelligence Unit and amending its Criminal Code to improve the criminalization of money laundering and terrorist financing. The FATF, however, identified that certain strategic AML/CFT deficiencies remain. Tajikistan must continue to work on implementing its action plan to address such deficiencies: (1) addressing pending issues related to the criminalization of money laundering and terrorist financing; (2) establishing and implementing adequate procedures to confiscate assets linked to money laundering and identify and freeze terrorist assets; (3) ensuring a fully operational and effective Financial Intelligence Unit and improving suspicious transaction reporting requirements; and (4) improving and expanding customer due diligence measures. The FATF encourages Tajikistan to eliminate the existing deficiencies and proceed with the process of implementing its action plan.

Trinidad and Tobago
In February 2010, Trinidad and Tobago showed strong political commitment to work with the FATF and the Caribbean Financial Action Task Force (CFATF) to address its strategic AML/CFT deficiencies. Since February 2012, Trinidad and Tobago has demonstrated progress in improving its AML/CFT regime, appointed a permanent director for its Financial Intelligence Unit, and adopted procedures to identify and freeze terrorist assets. The FATF will visit the country to confirm that the process of implementing the necessary reforms and actions is underway to address the deficiencies previously identified by the FATF.

Venezuela
In October 2010, Venezuela showed strong political commitment to work with the FATF and the Caribbean Financial Action Task Force (CFATF) to address its strategic AML/CFT deficiencies.

ALD/CFT. Since then, Venezuela has taken measures to improve its AML/CFT regime, promulgating the AML/CFT law that criminalizes terrorist financing, establishing the mandatory reporting of suspicious transactions (STR) for money laundering and terrorist financing, and issuing a new resolution aimed at addressing deficiencies in the terrorist asset freezing regime. The FATF, however, identified that strategic deficiencies remain. Venezuela must continue to work on implementing its action plan to address the remaining strategic deficiencies, primarily by establishing and implementing adequate procedures to identify and freeze terrorist assets. The FATF encourages Venezuela to address its remaining deficiencies and to continue with the implementation of its action plan.

Zimbabwe
In June 2011, Zimbabwe showed strong political commitment to work with the FATF and the ESAAMLG to address its strategic AML/CFT deficiencies. The FATF identified that certain strategic AML/CFT deficiencies remain. Zimbabwe should continue to work on implementing its action plan to address such deficiencies: (1) adequately criminalizing money laundering and terrorist financing; (2) establishing and implementing an adequate legal framework to identify and freeze resources belonging to terrorists; (3) ensuring a fully operational and effective Financial Intelligence Unit; (4) ensuring that financial institutions are aware of and comply with their obligations to forward suspicious transaction reports related to ML and TF; (5) enacting and implementing mutual legal assistance legislation; and (6) implementing the 1999 United Nations International Convention for the Suppression of the Financing of Terrorism. The FATF encourages Zimbabwe to eliminate existing deficiencies and to continue the process of implementing the action plan.

Turkmenistan
The FATF congratulates Turkmenistan on the significant progress in improving its AML/CFT regime and highlights that the country has fulfilled its commitments in the Action Plan regarding the strategic deficiencies identified by the FATF. Therefore, Turkmenistan is no longer subject to FATF monitoring in its overall AML/CFT compliance process. Turkmenistan will join the Eurasian Group (EAG) while addressing all AML/CFT issues identified in its Mutual Evaluation Report, to strengthen its AML/CFT regime.

Sincerely,

Waldir de Jesus Nobre
Superintendent of Market Relations and Intermediaries

Francisco José Bastos Santos
Superintendent of Institutional Investor Relations