March 7, 2023

FATF keeps DPRK, Iran and Myanmar on money laundering blacklist

The plenary of the Financial Action Task Force, a 39-member body that sets international standards to help enforcement authorities around the world investigate and pursue funds resulting from the illegal trade in arms or drugs, cyber fraud and other crimes, meets thrice annually.  Following the organization’s February 2023 meeting, the FATF updated its list of high-risk jurisdictions subject to a call for action.  The purpose of the publication is to warn FATF members and other jurisdictions to apply enhanced due diligence and sometimes countermeasures in order to protect the international financial system from money laundering, terrorist financing and weapons proliferation financing, and to provide incentives to high-risk jurisdictions to make sufficient improvements to be removed from the so-called Black List.  As of February 2023, out of 98 jurisdictions identified by FATF, 72 have made enough progress toward correcting their weaknesses to be removed from the FATF Black List.

As explained by FATF on February 24, 2023 in its introduction to the updated list, neither Myanmar, Iran, nor the Democratic People’s Republic of Korea has taken measures to address the deficiencies outlined in action plans developed for those jurisdictions previously.  Iran, for example, has failed to enact the Palermo and Terrorist Financing Conventions, causing FATF to leave Iran on the list of high-risk jurisdictions and to lift the suspension of counter-measures.  Until further notice, FATF urges all jurisdictions to require increased supervisory examination for subsidiaries and branches of financial institutions based in Iran, and to implement enhanced reporting systems for financial transactions involving Iranian institutions.  Likewise, according to FATF the DPRK has failed to address significant deficiencies in its programs to detect and prevent money laundering and terrorist financing, and will remain subject to enhanced due diligence, with special attention given to business relationships and transactions with the DPRK and with its financial institutions and companies and persons acting on their behalf.  Regarding Myanmar, a commitment was made by the country’s leaders in February 2020 to address the action plan formulated to address the strategic deficiencies in its financial systems.  However, insufficient progress has been made since that time; therefore, Myanmar remains on FATF’s list.

In parallel with its publication of the list of high-risk jurisdictions subject to a call for action, the FATF publishes a list of jurisdictions to be placed under increased monitoring while resolving strategic deficiencies pursuant within a specific timeframe.  Often referred to as the Grey List, it currently includes Albania, Jordan, the United Arab Emirates, several Caribbean countries, Türkiye, Yemen, Syria, the Philippines, Gibraltar, and nine African countries – among them two new additions to the list:  South Africa and Nigeria.  Cambodia and Morocco were removed from the FATF Grey List.

On February 24, 2023, the FATF suspended the membership of the Russian Federation.

FATF Black List | FATF Grey List