Circular Letter No. CC/2022/00000007

Circular Letter No. CC/2022/00000007
Sent to:
Credit Institutions, Financial Companies, Payment Institutions, and Electronic Money Institutions.
Subject: Disclosure of FATF communications (March 2022 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 March 2 and 4, 2022, the FATF released the following documents:

a. HIGH-RISK JURISDICTIONS SUBJECT TO A CALL FOR ACTION, dated March 4, 2022, which identifies jurisdictions subject to countermeasures and jurisdictions with strategic deficiencies in money laundering and terrorist financing prevention 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: http://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/call-for-action-march-2022.html

b. JURISDICTIONS UNDER INCREASED MONITORING, dated March 4, 2022, which identifies jurisdictions with strategic deficiencies in money laundering and terrorist financing prevention 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: http://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/increased-monitoring-march-2022.html

Regarding these documents, the following should be noted:

• The review process of the High-Risk Jurisdictions Subject to a Call for Action list was conditioned by pandemic restrictions, which is why the above-mentioned document refers to the content of the February 2020 communication.

• Regarding the list of Jurisdictions Under Increased Monitoring:

  • Since October 2021, the progress of 17 jurisdictions has been assessed, and their statements have been updated;
  • The Hashemite Kingdom of Jordan, the Republic of Haiti, the Republic of Mali, and the Republic of Turkey decided to postpone their reporting – taking into account the impact generated by the pandemic –; therefore, for these jurisdictions, the FATF statements from June and October 2021 were included in this document, which 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 United Arab Emirates;
  • It is also worth noting the exit of the Republic of Zimbabwe.

In addition, it is important to highlight the publication of the document FATF PUBLIC STATEMENT ON THE SITUATION IN UKRAINE, dated March 4, 2022. In this document, the full content of which can be consulted at https://www.fatf-gafi.org/publications/fatf-general/documents/ukraine-2022.html, the FATF notes, inter alia:

• its concern regarding the impact generated by the invasion in the context of money laundering, terrorist financing, and proliferation financing risks, as well as on the integrity of the financial system, the economy in general, and security;
• that malicious cyber activity directed at financial institutions and systems undermines financial integrity and stability and may compromise the ability of the private sector and competent authorities to implement and monitor essential money laundering and terrorist financing prevention controls, and prevent legitimate users from accessing essential financial services;
• the importance of ensuring that non-profit organizations and any other humanitarian actors can provide necessary assistance without delays, interruptions, or disincentives. It also recalls that the requirements of its standards applicable to non-profit organizations cannot be used to justify intimidation or repression of legitimate humanitarian activities;
• that all jurisdictions must be attentive to the possibility of emerging risks from the evasion of measures adopted to protect the international financial system from money laundering, terrorist financing, and proliferation financing risks resulting from Russia's aggression against Ukraine.

II. COMPARATIVE FRAMEWORK WITH COMMUNICATIONS ISSUED BY THE FATF IN OCTOBER 2021

HIGH-RISK JURISDICTIONS SUBJECT TO A CALL FOR ACTION | JURISDICTIONS UNDER INCREASED MONITORING ---|--- JURISDICTIONS SUBJECT TO THE APPLICATION OF COUNTERMEASURES | JURISDICTIONS SUBJECT TO A SPECIAL RISK ASSESSMENT ASSOCIATED WITH THEM JURISDICTIONS SUBJECT TO A MONITORING PROCESS | JURISDICTIONS THAT LEFT THE MONITORING PROCESS

PLENARY MEETING
2-4 MARCH 2022
Democratic People's Republic of Korea (North Korea) Islamic Republic of Iran -- | Barbados, Burkina Faso, United Arab Emirates, Cayman Islands, Jamaica, Kingdom of Cambodia, Hashemite Kingdom of Jordan, Kingdom of Morocco, Republic of Albania, Syrian Arab Republic, Republic of the Philippines, Republic of Haiti, Republic of Yemen, Islamic Republic of Pakistan, Republic of Mali, Republic of Malta, Republic of Nicaragua, Republic of Panama, Republic of Senegal, Republic of South Sudan, Republic of Turkey, Republic of Uganda, Union of Myanmar

Republic of Zimbabwe |

PLENARY MEETING
19-21 OCTOBER 2021
Democratic People's Republic of Korea (North Korea) Islamic Republic of Iran -- | Barbados, Burkina Faso, Cayman Islands, Jamaica, Kingdom of Cambodia, Hashemite Kingdom of Jordan, Kingdom of Morocco, Republic of Albania, Syrian Arab Republic, Republic of the Philippines, Republic of Haiti, Republic of Yemen, Islamic Republic of Pakistan, Republic of Mali, Republic of Malta, Republic of Nicaragua, Republic of Panama, Republic of Senegal, Republic of South Sudan, Republic of Turkey, Republic of Uganda, Union of Myanmar, Republic of Zimbabwe

Republic of Botswana |
Republic of Mauritius |

Mod. 40000375/T – 01/14

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 Article 99(1)(b) of Law No. 83/2017, the adoption 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 Article 99(3)(f)-(h) and (k) of the aforementioned Law No. 83/2017.

b. Enhanced identification and due diligence measures, under Article 36(2) and Article 37(3)(b) of the aforementioned Law No. 83/2017, shall continue to be adopted, and all business relationships, occasional transactions, and operations involving the DEMOCRATIC PEOPLE'S REPUBLIC OF KOREA (NORTH KOREA) or the ISLAMIC REPUBLIC OF IRAN shall be examined with special care, necessarily including the measures specified in the High-Risk Jurisdictions Subject to a Call For Action.

c. Regarding business relationships, occasional transactions, and operations involving jurisdictions subject to a monitoring process, or other high-risk third countries 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 specifically identified risk must be adopted, without prejudice to the above, under Article 36(2), Article 37(1), and Article 37(3)(b) of the aforementioned Law No. 83/2017.

Supplementary information on the conclusions of the FATF plenary meeting can be obtained on the website www.fatf-gafi.org.

1 Including their representatives and beneficial owners.