Circular Letter No. CC/2023/00000016

Circular Letter No. CC/2023/00000016
Sent to:
Credit Institutions, Financial Companies, Payment Institutions, and Electronic Money Institutions.
Mod. 99999924/T – 01/14
Subject: Disclosure of FATF communications (February 2023 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 February 22 and 24, 2023, the FATF published the following documents:

a. HIGH-RISK JURISDICTIONS SUBJECT TO A CALL FOR ACTION, dated February 24, 2023, 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: https://www.fatf-gafi.org/en/publications/High-risk-and-other-monitored-jurisdictions/Call-for-action-February-2023.html

b. JURISDICTIONS UNDER INCREASED MONITORING, dated February 24, 2023, 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: https://www.fatf-gafi.org/en/publications/High-risk-and-other-monitored-jurisdictions/Increased-monitoring-february-2023.html

Regarding these documents, the following should be noted:

• Regarding the list of High-Risk Jurisdictions Subject to a Call for Action, the review process for the Democratic People's Republic of Korea (North Korea) and the Islamic Republic of Iran has been conditioned by pandemic restrictions, which is why the document above refers to the content of the February 2020 communication regarding these two jurisdictions;

• Regarding the list of Jurisdictions Under Increased Monitoring:

  • Since October 2022, the progress of 19 jurisdictions has been assessed, and their respective statements have been updated;
  • The Democratic Republic of the Congo, the Republic of Mozambique, and the United Republic of Tanzania decided to postpone their reporting, so for these jurisdictions, the FATF statements from October 2022 were included in this document, but they may not reflect the current state of their respective money laundering and terrorist financing prevention regimes;
  • Two new jurisdictions were identified and included: the Federal Republic of Nigeria, and the Republic of South Africa;
  • The Kingdom of Cambodia and the Kingdom of Morocco are noted as having exited.

In addition, it is important to note the additional measures adopted by the FATF regarding the Russian Federation, which can be consulted here: https://www.fatf-gafi.org/en/publications/Fatf-general/outcomes-fatf-plenary-february-2023.html

II. COMPARATIVE FRAMEWORK WITH COMMUNICATIONS ISSUED BY THE FATF IN OCTOBER 2022

HIGH-RISK JURISDICTIONS SUBJECT TO A CALL FOR ACTION

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
22-24 FEBRUARY 2023

Democratic People's Republic of Korea (North Korea)

Islamic Republic of Iran;
Union of Myanmar

Barbados, Burkina Faso, United Arab Emirates, Gibraltar, Cayman Islands, Jamaica, Hashemite Kingdom of Jordan, Republic of South Africa, Republic of Albania, Syrian Arab Republic, 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 Panama, Republic of Senegal, Republic of South Sudan, Republic of Turkey, Republic of Uganda; United Republic of Tanzania

Kingdom of Cambodia;
Kingdom of Morocco;

PLENARY MEETING
20-21 OCTOBER 2022

Democratic People's Republic of Korea (North Korea)

Islamic Republic of Iran;
Union of Myanmar

Barbados, Burkina Faso, United Arab Emirates, Gibraltar, Cayman Islands, Jamaica, Kingdom of Cambodia, Hashemite Kingdom of Jordan, Kingdom of Morocco, Republic of Albania, Syrian Arab Republic, Democratic Republic of the Congo, Republic of the Philippines, Republic of Haiti, Republic of Yemen, Republic of Mali, Republic of Mozambique, Republic of Panama, Republic of Senegal, Republic of South Sudan, Republic of Turkey, Republic of Uganda; United Republic of Tanzania

Islamic Republic of Pakistan;
Republic of Nicaragua;

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 letters f) to h) and k) of Article 99(3) of the aforementioned Law No. 83/2017.

b. Enhanced identification and 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 – necessarily including the measures specified in the High-Risk Jurisdictions Subject to a Call For Action – as well as 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 included in 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), all 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 respective representatives and beneficial owners.