The Financial Action Taskforce (FATF) has updated its list of countries with deficiencies in their anti-money laundering and counter-terrorist financing regimes. It is expected that HM Treasury will shortly update their list to reflect the FATF changes.
Who is on the list?
Iran and the Democratic People's Republic of Korea are noted as having on-going and substantial money laundering and terrorist financing risks.
The following countries are listed as not having made sufficient progress to address strategic deficiencies in their anti-money laundering and counter-terrorist financing regimes:
- Cuba
- Bolivia
- Ethiopia
- Ghana
- Indonesia
- Kenya
- Myanmar
- Nigeria
- Pakistan
- Sao Tome and Principe
- Sri Lanka
- Syria
- Tanzania
- Thailand
- Turkey
Who is off the list?
The following countries were on the HM Treasury list in July 2010, but do not feature on the new list:
- Angola
- Antigua and Barbuda
- Azerbaijan
- Ecuador
- Morocco
- Nepal
- Paraguay
- Qatar
- Sudan
- Trinidad and Tobago
- Turkmenistan
- Ukraine
- Yemen
MLROs should still consider the individual money laundering and terrorist financing risks of individual clients from these jurisdictions, as they would for all other jurisdictions.
Read the FATF list
What should firms do?
Regulation 14 of the Money Laundering Regulations 2007 provides that enhanced due diligence should be applied in any situation that may present a higher risk of money laundering and terrorist financing.
However the regulations do not lay down specific requirements for how to conduct enhanced due diligence in generic higher risk categories.
You should take the following steps to meet this obligation:
- be aware of which jurisdictions are on the HM Treasury list and the sanctions list
- be alert to unexpected instructions to undertake transactions relating to one of those jurisdictions where this is outside of your normal practice
- be alert to unexpected increases in instructions to undertake transactions relating to one of those jurisdictions or where the instructions are unusual given your understanding of normal practice in those jurisdictions
- be alert to large asset transfers out of those jurisdictions
- consider undertaking further due diligence checks if you are not sure who you are dealing with and ask more questions about the source of funds and purpose of the transaction
- have a process for checking clients against the sanctions lists where they have a connection with a jurisdiction which is on the sanctions list