February 25, 2020

FATF calls for action against North Korea and Iran

On February 21, 2020 the Paris-based Financial Action Task Force released a call for action against two high-risk jurisdictions –  North Korea and Iran.  It expressed continued concerns with North Korea’s inability to adequately address anti-money laundering, failure to combat the financing of terrorism as well as their failure to stop unlawful activities related to the creation and financing of weapons of mass destruction.  Because of this, the FATF urged its members and all jurisdictions to pay special attention to financial transactions involving North Korea and North Korean companies in order to protect the financial sector from these illegal activities.  It also encouraged all jurisdictions to apply counter-measures such as closing existing branches and terminating correspondent relationships with North Korean banks and subsidiaries as required by applicable United Nations Security Council Resolutions.

The FATF also addressed Iran’s failure to complete their action plan created back in June of 2016 to remedy “strategic deficiencies” in anti-money laundering laws pointing out that the action plan expired in January of 2018.  It urged members and all jurisdictions to continue counter-measures recommended in 2019 such as mandatory supervisory examinations of all bank branches and subsidiaries based in Iran, increased reporting of relevant financial transactions, and increased external audit requirements for any financial group that has a branch or subsidiary in Iran.  Now that Iran has also failed to enact the Palermo and Terrorist Financing Conventions in accordance with FATF standards, the FATF urged all jurisdictions to take further actions against Iran in accordance with Recommendation 19, a list of examples on how countries can mitigate financial risk.  Finally, the FATF stated that Iran will remain a high-risk jurisdiction until they complete the 2016 action plan and ratify the Palermo and Terrorist Financing Conventions.

FATF Press Release | FATF Recommendation 19