In order to protect the international financial system from money laundering and terrorist financing risks, the FATF issued statements on February 14, 2014. Links to the full texts of these statements can be found at http://www.fatf-gafi.org. The following is a summary of the statements and OSFI’s expectations with respect to them:
Islamic Republic of Iran
…OSFI is again reminding all FRFIs of the risk of doing business with individuals and entities based in or connected to Iran, including the risk of correspondent relationships being used to bypass or evade counter-measures and risk mitigation practices. OSFI requests that FRFIs that are subject to the requirements of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act continue totake the following measures:
- Classify clients, banks and other financial institutions based in or connected to Iran as high risk;
- Apply enhanced customer due diligence measures with respect to such clients and entities; and
- Take the FATF’s concerns into account when deciding whether to file a suspicious transaction report in respect of financial transactions emanating from, or destined to Iran.
Additionally, OSFI requests that FRFIs: review their internal processes relating to relationship management of such clients and beneficiaries in order to ensure that prescribed sanctions against Iran (see below) are implemented effectively; continue to treat all other clients, banks and other financial institutions based in or connected to Iran as high risk; and have processes in place to escalate the relationship to more senior levels of management under appropriate circumstances.
Democratic People's Republic of Korea (DPRK)
…OSFI is again reminding all FRFIs of the risk of doing business with individuals and entities based in or connected to the DPRK, including the risk of correspondent relationships being used to bypass or evade counter-measures and risk mitigation practices. …
Countries Representing a Risk Arising from Deficiencies
The FATF has determined that the following countries remain out of compliance with their action plans previously agreed with the FATF to address identified strategic deficiencies: Algeria, Burma (Myanmar), Ecuador, Ethiopia, Indonesia, Pakistan, Syria, Turkey, and Yemen.
Accordingly, OSFI expects FRFIs to consider as high the risks associated with financial transactions emanating from, destined to or connected to these countries.
FRFIs are reminded about the sanctions imposed on Burma and Syria by Canada. Please refer to the previous Notices on these sanctions for more detailed information.
The following countries have developed action plans with the FATF to address identified deficiencies and are demonstrating progress with the execution of those plans: Afghanistan*, Albania, Angola, Argentina, Cambodia*, Cuba, Iraq, Kenya, Kuwait, Kyrgyzstan, Lao People's Democratic Republic, Mongolia, Namibia, Nepal, Nicaragua, Papua New Guinea, Sudan, Tajikistan, Tanzania, Uganda and Zimbabwe (note).
Note: FRFIs are reminded about the sanctions imposed on Zimbabwe by Canada. Please refer to the previous Notice on these sanctions for more detailed information.
*The FATF is not yet satisfied that Afghanistan and Cambodia are making sufficient progress on their action plans agreed with the FATF. If Afghanistan and Cambodia do not take sufficient action to implement significant components of their action plan by June 2014, the FATF will identify Afghanistan and Cambodia as being out of compliance with their action plans, and will take the additional step of calling upon FATF members to consider the risks arising from the deficiencies associated with Afghanistan and Cambodia.
Accordingly, OSFI expects that FRFIs will take these deficiencies into account as appropriate when transacting business emanating from, destined to, or connected to these countries. More detailed information on the strategic deficiencies is contained in the FATF statement.
Jurisdictions no longer subject to FATF monitoring
Please note that Antigua and Barbuda, Bangladesh and Vietnam have met their commitments to remedy strategic AML/ATF deficiencies that the FATF had previously identified, and are no longer subject to the FATF’s monitoring process.
The Caribbean Financial Action Task Force (CFATF)
CFATF has a similar but separate process of identifying jurisdictions in the Caribbean area with strategic deficiencies that pose a risk to the international financial system, as defined by CFATF. Currently, two jurisdictions have been identified by CFATF as posing a risk: Belize and Guyana. More information can be found in the CFATF public statement on their web site at https://www.cfatf-gafic.org/
Accordingly, OSFI expects that FRFIs will take these deficiencies into account as appropriate when transacting business emanating from, destined to, or connected to these countries.
Canada is a founding member of the FATF and strongly supports its international standards for combating money laundering and terrorist financing.
The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) has also issued an Advisory, which can be viewed at http://www.fintrac.gc.ca/
If you have questions on any of the matters outlined in this Notice, please e-mail email@example.com