FINTRAC calls for continued vigilance when dealing with financial entities from the Islamic Republic of Iran and the Democratic People's Republic of Korea
In order to protect the international financial system from money laundering and terrorist financing risks, the Financial Action Task Force (FATF) issued two statements on June 22, 2012.
Islamic Republic of Iran and the Democratic People’s Republic of Korea
In its June 22, 2012 statement, the FATF re-affirmed the particular and exceptional concerns it first expressed in its October 2007 statement about the risk arising from deficiencies in the AML/CFT regime in the Islamic Republic of Iran. The FATF also re-affirmed the concerns it expressed for the first time in its February 2010 statement with respect to the risk arising from deficiencies in the AML/CFT regime in the Democratic People’s Republic of Korea. The FATF reaffirmed the call on its members to strengthen preventive measures to protect their financial sectors from such risks.
Accordingly, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) is reiterating to all reporting entities subject to the requirements of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, to the risks of doing business with individuals and entities based in or connected to Iran and the Democratic People’s Republic of Korea.
FINTRAC is advising that reporting entities should consider the above when deciding whether to file a suspicious transaction report in respect of financial transactions emanating from, or destined to Iran or the Democratic People’s Republic of Korea. Reporting entities are also encouraged to undertake enhanced customer due diligence with respect to clients and beneficiaries involved in such transactions.
Jurisdictions Representing a Risk Arising from Deficiencies
In its June 22, 2012 statement, the FATF calls on its members to consider the risks arising from the strategic AML/CFT deficiencies associated with the following jurisdictions that have not made sufficient progress in addressing the deficiencies, or that have not committed to an action plan developed with the FATF to address the deficiencies: Bolivia, Burma (Myanmar), Cuba, Ecuador, Ethiopia, Ghana, Indonesia, Kenya, Nigeria, Pakistan, São Tomé and Príncipe, Sri Lanka, Syria, Tanzania, Thailand, Turkey, Vietnam, and Yemen.
In addition, the FATF has identified Burma, Kenya, and Turkey as having not made sufficient progress since being identified in the Public Statement of June 2011. If these jurisdictions do not take significant actions by October 2012, the FATF will call upon its members to apply countermeasures proportionate to the risks associated with the jurisdiction.
FINTRAC is advising that reporting entities should consider giving special attention to transactions related to Bolivia, Burma (Myanmar), Cuba, Ecuador, Ethiopia, Ghana, Indonesia, Kenya, Nigeria, Pakistan, São Tomé and Príncipe, Sri Lanka, Syria, Tanzania, Thailand, Turkey, Vietnam, and Yemen.
In its June 22, 2012 statement, the FATF brought to the attention of its members several jurisdictions that have strategic AML/CFT deficiencies. The following jurisdictions have developed an action plan with the FATF to address identified deficiencies and demonstrated some progress with the execution of their plans: Afghanistan, Albania, Algeria, Angola, Antigua and Barbuda, Argentina, Bangladesh, Brunei Darussalam, Cambodia, Kuwait, Kyrgyzstan, Mongolia, Morocco, Namibia, Nepal, Nicaragua, Philippines, Sudan, Tajikistan, Trinidad and Tobago, Venezuela, and Zimbabwe.
Turkmenistan No Longer Subject to FATF Monitoring Process
The FATF welcomed Turkmenistan’s significant progress in improving its AML/CFT regime. Turkmenistan has largely met its commitments in its Action Plan regarding the strategic deficiencies that the FATF had identified. Turkmenistan is therefore no longer subject to the FATF’s monitoring process.
The FATF June 22, 2012 statements can be found at the following website: http://www.fatf-gafi.org/topics/high-riskandnon-cooperativejurisdictions/
Canada is a member of the FATF and strongly supports its efforts to combat money laundering and terrorist financing.
The Office of the Superintendent of Financial Institutions (OSFI) has also issued a Notice to all federally regulated financial institutions. For a copy of the Notice, visit: