On February 13, the U.S. Treasury Department issued a statement responding to a list of jurisdictions published by the European Commission as having strategic deficiencies related to anti-money laundering and countering the financing of terrorism (AML/CFT). The list—which includes certain jurisdictions with strategic deficiencies that were already identified by the Financial Action Task Force (FATF) (see previous InfoBytes coverage here)—also identifies 11 additional jurisdictions, including the U.S. territories of American Samoa, Guam, Puerto Rico, and the U.S. Virgin Islands. According to the European Commission, the “banks and other entities covered by EU anti-money laundering rules will be required to apply increased checks (due diligence) on financial operations involving customers and financial institutions from these high-risk third countries to better identify any suspicious money flows.”
In its response, the Treasury Department stated that it has “significant concerns about the substance of the list and the flawed process by which it was developed,” noting that the same AML/CFT legal framework that applies to the continental U.S. also generally extends to its territories. Treasury said it does not expect U.S. financial firms to take account of the European Commission’s list in their AML/CFT policies and procedures, and stressed that the FATF already develops a list of high-risk jurisdictions “as part of a careful and comprehensive process,” which does not list the U.S. territories.