On 18 October, the Financial Action Task Force (FATF) – the inter-governmental body that sets global standards and makes policy to combat money laundering and terrorist financing (among other things) – updated its guidance on a large number of jurisdictions and has identified that the following countries have “strategic deficiencies” in their AML/CTF regimes:

  • The Bahamas
  • Botswana
  • Cambodia
  • Ghana
  • Iceland
  • Mongolia
  • Pakistan
  • Panama
  • Syria
  • Trinidad and Tobago
  • Yemen
  • Zimbabwe

FATF will now seek to create action plans with these jurisdictions and will “closely monitor” the implementation of them.

It is also interesting to note that Ethiopia, Sri Lanka and Tunisia are now no longer subject to FATF monitoring and in its announcement FATF welcomed the “significant progress” made in each country.

Firms that are subject to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (the MLRs) must have in place a risk assessment that accounts for the differing risks presented by doing business in or with different jurisdictions. These documents, and the internal processes that implement them, should be updated to reflect the new guidance. In particular, FATF accompanied its announcement with the guidance that:

The FATF does not call for the application of enhanced due diligence to be applied to these jurisdictions, but encourages its members to take into account the information presented [in the list of countries] in its risk analysis

As always, a firm’s risk assessment and consideration of the particular risks to its business presented by counterparties or other jurisdictions is not prescriptive – it must be carefully considered in a subjective way and the facts of each case will differ. In any event, firms should be aware of the updated guidance and the ever-changing compliance landscape.

{ A number of jurisdictions have not yet been reviewed by the FATF. The FATF continues to identify additional jurisdictions, on an ongoing basis, that pose a risk to the international financial system.

 http://www.fatf-gafi.org/publications/high-risk-and-other-monitore