The Financial Action Task Force (FATF) recently updated its list of jurisdictions that have strategic deficiencies in their anti-money laundering, counter financing of terrorism and combatting weapons of mass destruction proliferation financing (AML/CFT/CPF) regimes (Trade-based Financial Crime, 22 October 2021).
As a result of this, the US treasury’s Financial Crimes Enforcement Network (FinCEN) has issued an advisory to provide financial institutions with guidance on reviewing their obligations and the need for risk-based approaches for certain jurisdictions.
Jurisdictions regraded
The FATF has added Jordan, Mali, and Turkey to its so-called grey list of jurisdictions under increased monitoring which the task force deems to have strategic deficiencies in their AML/CFT/CPF regimes. Botswana and Mauritius have been removed from the grey list.
FinCEN is reminding US covered financial institutions of their obligations to ensure that their due diligence programmes, which address correspondent accounts maintained for foreign financial institutions (FFIs), include “appropriate, specific, risk-based, and, where necessary, enhanced policies, procedures, and controls.”
These should be designed to detect and report known or suspected money laundering activity conducted through or involving any correspondent account established, maintained, administered, or managed in the US.
De-risking warning
FinCEN immediately goes on in its advisory to warn US FFI’s against the risk of wholesale de-risking.
“Such reasonable steps should not, however, put into question a financial institution’s ability to maintain or otherwise continue appropriate relationships with customers or other financial institutions, and should not be used as the basis to engage in wholesale or indiscriminate de-risking of any class of customers or financial institutions.”
FATF’s advisory, Financial Action Task Force Identifies Jurisdictions with Anti-Money Laundering and Combating the Financing of Terrorism and Counter-Proliferation Deficiencies can be found here.
Categories: Trade Based Financial crimes News
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