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AML/CFT BSA Rules and Regulation

FATF Updated List of Jurisdictions with AML/CFT Deficiencies

Terri Luttrell, CAMS-Audit, CFCS
March 27, 2020
Read Time: 0 min

Key Takeaways

  1. Albania, Barbados, Nicaragua among the countries added to the FATF watchlist.
  2. Trinidad and Tobago is removed from the FATF list.
  3. Iran and the DPRK are kept on the watchlist.

With all of the disruptions in normal life during the coronavirus pandemic, AML professionals advisories and updates can get lost in the shuffle.  

On March 26, 2020 FinCEN issued an advisory referencing the February 21, 2019 Financial Action Task Force (FATF) publication (available here) which updated its list of jurisdictions with anti-money laundering and combatting the financing of terrorism (AML/CFT) deficiencies. Financial institutions (FIs) should consider these changes when reviewing their overall BSA/AML programs and risk-based policies, procedures and practices. 

The FATF is charged with monitoring jurisdictions for compliance to their global AML/CTF standards, and reporting countries with strategic deficiencies.

Countries added to the FATF list

Specifically, what countries should your financial institution add to your list of areas of concern?

The FATF has found the following countries, although may be making progress and are committed to a strong AML/CFT regime, are currently deficient in their programs:

  • Albania
  • Barbados
  • Burma (Myanmar)
  • Jamaica
  • Mauritius
  • Nicaragua
  • Uganda

Countries removed from the FATF list

What countries should your financial institution remove from your list of areas of concern?

The FATF has removed the following jurisdiction and welcomes the significant progress it has made in improving its AML/CFT regime and in addressing related technical deficiencies to meet the commitments in their action plans.

  • Trinidad and Tobago

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Countries kept on the FATF watchlist

What in the recent FATF update hasn’t changed? The call for countermeasures or enhanced due diligence for the following jurisdictions remains strong:

1) Democratic People's Republic of Korea (DPRK) is subject to counter-measures due to significant deficiencies in its anti-money laundering and combating terrorism regime. Also, `the serious threats they pose to the integrity of the international financial system.

2) Iran is subject to enhanced due diligence measures proportionate to the risks arising from the jurisdiction. As of February 2020, the FATF states that Iran has not completed their action plan as they committed.  With this outstanding, the FATF remains concerned with terrorist financing, and enhanced due diligence efforts are called for as Iran poses a threat to the international financial system.

Since these are not new designations and are also on the OFAC list with robust sanctions programs, these jurisdictions should already be on each institution’s higher risk radar.

FinCEN guidance emphasizes enhanced due diligence programs

FinCEN guidance gives a strong reminder of USA PATRIOT ACT Section 312 obligations. The regulations require that covered financial institutions ensure their enhanced due diligence programs include steps to:

  • Conduct enhanced scrutiny of correspondent accounts to guard against money laundering and to identify and report any suspicious transactions in accordance with applicable law and regulation;
  • Determine whether the foreign bank for which the correspondent account is established in turn maintains correspondent accounts for other foreign banks. If so, take reasonable steps to obtain information relevant to assess and mitigate money laundering risks associated with the foreign banks;
  • Determine the identity of each owner of the foreign bank and the nature and extent of each owner’s ownership interest.

As part of ongoing suspicious activity reporting, FinCEN requests financial institutions to use the following key term when filing SARs on activity related to these countries: “February 2020 FATF FIN-2020-A001.”  

FATF generally updates its list of non-compliant jurisdictions on a quarterly basis. Financial institutions should review these updates and adjust their AML programs accordingly. It is important to remember that if a jurisdiction is removed from this list, each institution should still review its risk profile to determine if it continues to be an area of concern for them.

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About the Author

Terri Luttrell, CAMS-Audit, CFCS

Compliance and Engagement Director
Terri Luttrell is a seasoned AML professional and former director and AML/OFAC officer with over 20 years in the banking industry, working both in medium and large community and commercial banks ranging from $2 billion to $330 billion in asset size.

Full Bio

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