August 31, 2021

FCA reminds firms to beware of Afghanistan AML and sanctions risks

Following the withdrawal of troops and foreign civilians from Afghanistan, the UK Financial Conduct Authority published a statement highlighting the risks to financial operators and the continued need for effective procedures to recognize and counter these risks.

The FCA addressed compliance requirements under the Proceeds of Crime Act 2002, as well as the Money Laundering, Terrorist Financing and Transfer of Funds (information on the Payer) Regulations 2017 (“MLRs”), as amended.  In particular, the FCA asked that firms take a risk-based approach to ensure appropriate monitoring and assessment of transactions involving Afghanistan in order to mitigate the risk of being exploited to finance terrorism or launder money, even though Afghanistan is not currently listed as a high-risk jurisdiction in the MLRs.  The FCA also emphasized the continued responsibility of firms to report suspicious activity to the UK Financial Intelligence unit of the National Crime Agency.  Finally, the FCA noted that some Afghanistan-related sanctions are already in place, and sanctions screening should proceed as required.

FCA  statement