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FATF, the international group that makes global Anti-Money Laundering and Countering Terrorism Financing (AML/CTF) policies, has published two latest updates on international ML/TF risk.
The recent reports provide an update on the countries that may disrupt the international financial system.
High-Risk Jurisdictions subject to a Call for Action – October 2022: This mentions that The call for action issued on February 21, 2020, regarding the Democratic People’s Republic of Korea, Myanmar, and Iran is still in effect.
High-risk jurisdictions have weak regimes to tackle money laundering, financing of proliferation, and terrorism financing. The FATF calls on all nations identified as high-risk to exercise enhanced due diligence.
In the most serious situations, nations are urged to implement counter-measures to safeguard the global financial system from the risks associated with money laundering, terrorist financing, and proliferation financing (ML/TF/PF) that the country poses. The list is referred to as the “black list”.
Jurisdictions under Increased Monitoring – October 2022: This notes jurisdictions with strategic flaws in their AML/CTF regimes and they are collaborating with the FATF actively to fix them.
Countries that are subject to increasing scrutiny are actively collaborating with the FATF to resolve any strategic flaws in their regimes to combat money laundering, terrorism financing, and proliferation financing.
When the FATF puts a jurisdiction under heightened monitoring, it denotes that the nation has undertaken to address any detected strategic shortcomings within specified periods quickly and is subsequently subject to intensified monitoring. This list is referred to as the “grey list”.
Reporting institutions should be aware of nations that pose a significant risk of money laundering or terrorist funding and utilise this information to guide ML/TF risk checks, compliance processes, and decisions about reporting suspicious activity reports to relevant authorities.