August 18, 2016: Guidance from OSFI, from FINTRAC, from FATF & CFATF

On August 18th, OSFI sent out the following notice, which chronicle’s FINTRAC’s guidance on the guidances issued by FATF and CFATF about jurisdictions with strategic deficiencies in their AML/CTF regimes:

Continuing Countermeasures against the DPRK

OSFI is again reminding all FRFIs of the risks of doing business with individuals and entities based in or connected to the Democratic People’s Republic of Korea (DPRK), 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 (PCMLTFA)continue totake the following measures:

  • Continue to classify clients, banks and other financial institutions based in or connected to the DPRK as high risk (including branches and subsidiaries of such entities based in countries outside the DPRK); 
  • Continue to apply enhanced customer due diligence measures with respect to such clients and entities; and 
  • Continue to take the FATF’s concerns into account when monitoring financial transactions emanating from, or destined to the DPRK. 

Additionally, OSFI requests that FRFIs continue to implement the following measures: review their internal processes relating to relationship management of such clients and beneficiaries in order to ensure that prescribed sanctions against the DPRK are implemented effectively; and have processes in place to escalate the relationship to more senior levels of management under appropriate circumstances. 

Islamic Republic of Iran

Iran has adopted and committed to an Action Plan to address its strategic AML/CFT deficiencies, and is seeking technical assistance in the implementation of the Action Plan. 

However, until Iran implements the measures required to address the deficiencies identified in the Action Plan, the FATF will remain concerned with the terrorist financing risk emanating from Iran and the threat this poses to the international financial system. 

Accordingly, OSFI requests that FRFIs that are subject to the requirements of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act(PCMLTFA) take the following measures:

  • Apply enhanced customer due diligence measures with respect to clients located in or connected to Iran, and
  • Continue to take the FATF’s concerns into account when monitoring financial transactions emanating from, or destined to Iran.

Other Jurisdictions

OSFI expects that FRFIs will take the noted deficiencies into account as appropriate when transacting business emanating from, destined to, or connected to Afghanistan, Bosnia and Herzegovina, Guyana, Iraq, Lao PDR, Syria, Uganda, Vanuatu, and Yemen
The FATF has announced that Burma (Myanmar) and Papua New Guinea are no longer subject to monitoring by the FATF. 

Links:

OSFI Notice

FINTRAC Advisory

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