On July 1, 2021, the Financial Crimes Enforcement Network (FinCEN) announced that the Financial Action Task Force (FATF), an intergovernmental organization that sets international standards for combatting money laundering, the financing of terrorism, and combatting the financing of weapons of mass destruction proliferation (AML/CFT/CPF), published two updated statements – High-Risk Jurisdiction Subject to a Call for Action and Jurisdictions under Increased Monitoring – that identify jurisdictions with strategic AML/CFT/CPF deficiencies. The FATF advises financial institutions to review and consider both statements to determine their obligations and level of risk involved with handling transactions with identified jurisdictions.
The High-Risk Jurisdictions Subject to a Call for Action statement identifies jurisdictions with significant AML/CFT/CPF strategic deficiencies and call upon FATF members to apply strict counter measures and enhanced due diligence in order to protect the international financial system from the risk of financial crimes emanating from these countries, while the Jurisdictions under Increased Monitoring statement identifies jurisdictions that have strategic AML/CFT/CPF deficiencies but have committed to work with the FATF to address the deficiencies by an agreed upon timeline. In particular, the FATF added Haiti, Malta, the Philippines, and South Sudan as jurisdictions that warranted increased monitoring, while Ghana was removed from the increased monitoring category. In addition, FATF identified Iran and North Korea as high-risk jurisdictions to which extensive restrictions and prohibitions apply regarding the opening or maintaining of any correspondent account for persons and entities connected with these locations.
FinCEN encouraged US financial institutions to become familiar with both FATF statements as well as certain financial requirements and prohibitions in the UN Security Council Resolutions and US sanctions implemented by the Office of Foreign Assets Control to better implement their risk-based policies , procedures, and practices. In addition, FinCEN urged US financial institutions to pay particular attention to Iran after FinCEN determined in 2019 that it was a Jurisdiction of Primary Money Laundering Concern and issued a final rule pursuant to Section 311 of the USA PATRIOT Act that imposed a fifth special measure against Iran.
FinCEN press release | High Risk Jurisdiction Subject to a Call for Action | Jurisdictions under Increased Monitoring