Source: https://www.fincen.gov/resources/advisories/fincen-advisory-fin-2016-a004
Timestamp: 2019-04-21 19:00:09+00:00

Document:
On June 24, 2016, the Financial Action Task Force (FATF) updated its list of jurisdictions with strategic AML/CFT deficiencies. These changes may affect U.S. financial institutions’ obligations and risk-based approaches with respect to relevant jurisdictions.
The FATF recognizes that Iran has made progress in adopting and making high-level commitments to an Action Plan to address its strategic anti-money laundering and anti-terror financing deficiencies. In recognition of this progress as well as the continued risk posed by Iran to the international financial system, the FATF has conditionally suspended its call for counter-measures against Iran for a period of 12 months during which time the FATF will closely monitor Iran’s progress in implementing the Action Plan. Accordingly, for the next 12 months, the FATF has removed Iran from category A (Countermeasures) and placed this jurisdiction in category B (Enhanced Due Diligence).
Afghanistan, Bosnia and Herzegovina, Guyana, Iraq, Lao PDR, Syria, Uganda, Vanuatu, and Yemen.
Myanmar (Burma) and Papua New Guinea have been removed from the FATF listing and monitoring process due to their significant progress in establishing the legal and regulatory framework to address all or nearly all their strategic AML/CFT deficiencies on a technical level. These jurisdictions will work with their respective FATF-Style Regional Bodies as they continue to address the full range of AML/CFT issues identified as part of the mutual evaluation process.
DPRK is subject to the FATF's call on its members and other countries to apply countermeasures to protect the international financial system from AML/CFT risks. The FATF, however, made changes to the Public Statement on DPRK to reflect the high risk of proliferation finance emanating from DPRK, in line with United Nations Security Council Resolution (UNSCR) 2270. U.S. financial institutions are subject to a broad range of restrictions and prohibitions and should continue to consult existing FinCEN and U.S. Department of the Treasury’s Office of Foreign Assets Control’s (OFAC) guidance on engaging in financial transactions with DPRK.
The FATF’s conditional 12-month suspension of its call for countermeasures does not remove or alter any obligations U.S. financial institutions may have with respect to Iran under U.S. law and regulation. U.S. financial institutions are still subject to a broad range of restrictions and prohibitions on engaging in transactions with or involving Iran due to a number of illicit financing risks, including money laundering, terrorist financing, and the financing of Iran’s ballistic missile program. U.S. financial institutions must continue to comply with existing U.S. sanctions on Iran. These sanctions include a general prohibition on dealing with Iran and the Government of Iran, as well as designated Iranian banks and other entities appearing on the OFAC List of Specially Designated Nationals and Blocked Persons, which include Iranian entities with links to terrorist activity and Iran’s ballistic missile program. Information about these sanctions is publicly available on OFAC's website:www.treasury.gov/resource-center/sanctions/Programs/Pages/iran.aspx.
In concurrence with FATF’s actions on DPRK and Iran and pursuant to Section 312 of the USA PATRIOT Act, 31 USC § 5318(i), as described in implementing regulations 31 C.F.R. § 1010.610(b) and (c), FinCEN advises U.S. financial institutions to apply enhanced due diligence when maintaining correspondent accounts for foreign banks operating under a banking license issued by a designated country. However, as noted above, the United States already has extensive restrictions and prohibitions on the holding of any correspondent accounts with foreign banks licensed by DPRK or Iran.
U.S. financial institutions also should consider the risks associated with the AML/CFT deficiencies of the countries identified under this section (Afghanistan, Bosnia and Herzegovina, Guyana, Iraq, Lao PDR, Syria, Uganda, Vanuatu, and Yemen.)12 With respect to these jurisdictions, U.S. financial institutions are reminded of their obligations to comply with the general due diligence obligations under 31 C.F.R. § 1010.610(a) in addition to their general obligations under 31 U.S. C. § 5318(h) and its implementing regulations.13 As required under 31 C.F.R. § 1010.610(a), covered financial institutions should ensure that their due diligence programs, which address correspondent accounts maintained for foreign financial institutions, include appropriate, specific, risk-based, and, where necessary, enhanced policies, procedures, and controls that are reasonably 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 United States.
For jurisdictions that have been recently removed from the FATF listing and monitoring process (Myanmar (Burma) and Papua New Guinea), financial institutions should take the FATF’s decisions and the reasons behind the delisting into consideration when assessing risk consistent with their obligations under 31 C.F.R. § 1010.210.
1 The FATF (www.fatf-gafi.org) is a 37-member intergovernmental policy-making body that establishes international standards to combat money laundering and counter the financing of terrorism and proliferation of weapons of mass destruction. The United States is a member of the FATF.
2 The FATF public identification of countries with strategic AML/CFT deficiencies is in response to the G-20 leaders’ call for the FATF to reinvigorate its process for assessing countries’ compliance with international AML/CFT standards. The G-20 leaders have consistently called for the FATF to issue regular updates on jurisdictions with strategic deficiencies. Specifically within the FATF, the International Cooperation Review Group (ICRG) monitors and identifies countries with AML/CFT deficiencies. For more information on the ICRG procedures, please visit the FATF’s website – www.fatf-gafi.org/topics/high-riskandnon-cooperativejurisdictions/documents/moreabouttheinternationalco-operationreviewgroupicrg.html.
3 31 U.S. C. § 5318(h) and (i).
4 OFAC issued new DPRK sanctions pursuant to Executive Orders 13687 and 13722 on July 6, 2016. See https://www.treasury.gov/press-center/press-releases/Pages/jl0506.aspx for more information.
5 UNSCRs include 2270 (March 2016), 2094 (March 2013), 2087 (January 2013), 1874 (June 2009), and 1718 (October 2006). See www.un.org/en/documents for more information.
6 FinCEN Advisories pertaining to DPRK: FIN-2013-A005, FIN-2009-A002, and FinCEN Advisory – Issue 40.
9 76 FR 72756 (Nov. 25, 2011). See FinCEN, Finding that the Islamic Republic of Iran is a Jurisdiction of Primary Money Laundering Concern.
10 UNSCR 2231 (July 2015) relating to implementation of the Joint Comprehensive Plan of Action of July 14, 2015 (JCPOA) provides that, when the International Atomic Energy Agency (IAEA) verified that Iran completed certain nuclear commitments under the JCPOA: (1) prior Iran-related UNSCRs (including UNSCRs 1929 (June 2010), 1803 (March 2008), 1747 (March 2007), and 1737 (December 2006)) would be terminated and (2) states would simultaneously comply with certain provisions of Annex B to UNSCR 2231, including paragraph 6 relating to financial provisions and restrictions. On January 16, 2016, the IAEA issued its report verifying that Iran had completed certain nuclear commitments under the JCPOA; as a result, UNSCRs 1929, 1803, 1747, and 1737 were terminated, and the measures described in Annex B of UNSCR 2231 came into effect. See http://www.un.org/en/sc/2231/ for more information.
11 31 C.F.R. § 1010.610(b): Enhanced Due Diligence for correspondent accounts established, maintained, administered or managed in the United States for foreign banks.
12 This Advisory updates previous FATF-related guidance on identified jurisdictions with AML/CFT deficiencies. Additional FinCEN guidance on Syria includes FIN-2013-A002 and FIN-2011-A010 as well as FinCEN’s guidance on the Commercial Bank of Syria; see FIN-2011-A013.
13 31 C.F.R. § 1010.210: Anti-money laundering programs.
14 Required under 31 C.F.R. §§ 1020.320, 1021.320, 1022.320, 1023.320, 1024.320, 1025.320 and 1026.320.

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