On July 1, 2019 the CSSF published Circular 19/722 relating to recent declarations of the Financial Action Task Force (“FATF”).
Jurisdictions with substantial and strategic deficiencies
FATF maintained its position that the Democratic People's Republic of Korea (DPRK) is a jurisdiction whose anti-money laundering and combating the financing of terrorism regime has substantial and strategic deficiencies. FATF appealed to its members to apply countermeasures and reminded members to take measures to close North Korean bank subsidiaries, branches or representative offices in their respective territories.
The CSSF advised to:
- Consider, with particular attention, the business relations and operations with this jurisdiction
- Apply enhanced due diligence and follow-up measures
- Inform the CSSF in the event of a banking correspondence relationship with a DPRK credit institution
- Maintain strengthened mechanisms for reporting suspicions to the Financial Intelligence Unit
Jurisdictions requiring enhanced due diligence
FATF stated that, despite efforts made in this domain, Iran is a jurisdiction whose anti-money laundering (AML) and combating the financing of terrorism regime requires the application of enhanced due diligence measures proportionate to the risks arising from such jurisdiction.
FATF decided to maintain the suspension of countermeasures but requires enhanced review and supervision of subsidiaries and branches of financial institutions located in Iran given that there are still gaps in the AML regime.
The CSSF advised to:
- Consider with particular attention the business relations and operations with this jurisdiction, including with natural and legal persons of this country
- Apply enhanced due diligence and monitoring measures for business relationships, in particular by increasing the number and timing of controls and by selecting the types of transactions that require further examination, as well as obtaining information on the reasons for proposed transactions
- Maintain strengthened mechanisms for reporting suspicions to the Financial Intelligence Unit
Jurisdictions whose AML regime is unsatisfactory
FATF stated that Bahamas, Botswana, Cambodia, Ethiopia, Ghana, Pakistan, Panama, Sri Lanka, Syria, Trinidad and Tobago, Tunisia and Yemen are jurisdictions whose anti-money laundering and combating the financing of terrorism regime is not satisfactory.
- The CSSF advised to consider the deficiencies identified by FATF in its declarations and the risks resulting from these deficiencies in business relations and transactions with these jurisdictions.
- The CSSF points out that Serbia is no longer a jurisdiction subject to FATF's continuous monitoring process, but continues to work with the FATF regional style body.
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