The Financial Crimes Enforcement Network (FinCEN) recently announced that the Financial Action Task Force (FATF), an intergovernmental body that sets internal standards for anti-money laundering, countering the financing of terrorism, and countering the financing of proliferation of weapons of mass destruction (AML/CFT/CPF), released updated lists of jurisdictions with strategic AML/CFT/CPF deficiencies. On June 23, 2022, the FATF issued two statements: the Jurisdictions under Increased Monitoring, which includes jurisdictions with deficiencies that have committed to or are actively working with the FATF to address those deficiencies within a certain timeframe, and the High-Risk Jurisdictions Subject to a Call for Action, which includes jurisdictions with significant deficient that FATF members are urged to apply enhanced due diligence with and, in extreme cases, apply counter-measures to protect the international financial system from money laundering, terrorist financing, and proliferation financing risks.
FinCEN reports that on June 17, 2022, the FATF removed Malta from its list of Jurisdictions under Increased Monitoring and added Gibraltar to that list, while the FATF’s list of High-Risk Jurisdictions Subject to a Call for Action remains unchanged and still includes Iran and the Democratic People’s Republic of Korea (DPRK) as locations subject to additional FATF countermeasures. According to FinCEN, existing US sanctions and FinCEN regulations already prohibit the opening and maintaining of correspondent account relationships with both Iran and the DPRK.
FinCEN also reminds all US covered financial institutions of their obligation to comply with the due diligence obligations for foreign financial institutions (FFIs) and the need to file a Suspicious Activity Report if they suspect that a transaction or customer may have engaged in money laundering, terrorist financing or other violations of federal law or regulations. The United Nations has also adopted several UN Security Council resolutions (UNSCRs) implementing economic and financial sanctions that Member States are bound to follow, and FinCEN emphasizes that financial institutions should be familiar with the requirements and prohibitions contained in these UNSCRs.