AML

FinCEN Releases Advisory On FATF’s List Of AML/CFT Deficiencies

The Financial Crimes Enforcement Network (FinCEN) has issued an advisory to announce an updated list of jurisdictions with anti-money laundering (AML) and Countering Financing of Terrorism (CFT) Act deficiencies.

FinCEN specifically pointed out issues with Iran and North Korea, referred to as the Democratic People’s Republic of Korea (DPRK) in the advisory. The agency called on financial institutions (FIs) to be extra diligent when forming business relationships, and carrying out transactions with companies and banks in those particular nations.

“The FATF remains concerned by the DPRK’s failure to address the significant deficiencies in [its AML/CFT] regime, and the serious threats they pose to the integrity of the international financial system. The FATF urges the DPRK to immediately and meaningfully address its AML/CFT deficiencies. [Furthermore], the FATF has serious concerns with the threat posed by the DPRK’s illicit activities related to the proliferation of weapons of mass destruction (WMDs) and its financing," according to the advisory.

In addition to boosting security, FinCEN has called on its members "to apply effective counter-measures, and targeted financial sanctions in accordance with applicable United Nations Security Council [UNSC] resolutions, to protect their financial sectors from money laundering, financing of terrorism and WMD proliferation [financing risks] emanating from the DPRK. Jurisdictions should take necessary measures to close existing branches, subsidiaries and representative offices of DPRK banks within their territories, and terminate correspondent relationships with DPRK banks, where required by relevant UNSC resolutions."

As for Iran, FinCEN declared late last month that the country was a "jurisdiction of primary money laundering concern," and issued an advisory detailing the ways its government uses the international finance system to carry out its illegal activities.

In addition, the agency imposed a final rule, pursuant to the USA PATRIOT Act, that prohibits U.S. FIs from opening or maintaining correspondent accounts for, or on behalf of, an Iranian FI.

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