FATF Increased monitoring & High-risk jurisdictions for June 2023
On June 23rd, 2023, the Financial Action Task Force (FATF) updated its lists of jurisdictions under increased monitoring and jurisdictions subject to a call for action. Both lists are reviewed during FATF’s plenaries and updated based on FATF’s findings or due to political and economic developments around the globe.
Jurisdictions placed under increased monitoring are jurisdictions identified with strategic deficiencies. These jurisdictions do not mandate the application of enhanced due diligence measures or the rejection of customers originating from them. Yet, the FAFT calls for the application of a risk-based approach that considers the information provided in the risk analysis performed by obliged entities.
Often, these jurisdictions have committed to resolve swiftly the identified strategic deficiencies within agreed timeframes and are subject to increased monitoring. This list is externally referred to as the “grey list”.
It is noteworthy that Cameroon, Croatia, and Vietnam have been added to the FATF list for increased monitoring since its last version was published in February.
Jurisdictions identified with strategic deficiencies, placed by the FATF under increased monitoring as of June 2023, are:
- Burkina Faso
- Cayman Islands
- Democratic Republic of the Congo
- South Africa
- South Sudan
- United Arab Emirates
On the contrary, high-risk jurisdictions subject to a call for action are those identified with significant strategic deficiencies in their regimes for countering ML/TF. For these jurisdictions, obliged entities are required to apply enhanced due diligence measures. In this regard, the FATF lists the below three jurisdictions as high-risk:
- Democratic People’s Republic of Korea (DPRK)
Further to the above, the FATF continued the suspension of the Russian Federation’s membership due to the ongoing crisis in Ukraine.
Obliged entities subject to the Prevention and Suppression of Money Laundering and Terrorist Financing Law of 2007, Cyprus Law 188(I)/2007 are required to consider the above information. This shall be reflected through the Anti-Money Laundering (AML) risk-scoring employed and the due diligence measures applied for customer onboarding and monitoring.
It is highlighted that deviation from the appropriate actions constitutes a violation of the said Law and can expose an entity to additional AML risk and administrative or criminal offences.
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