FATF Increased monitoring & High-risk jurisdictions for October 2023Salvus Team
On October 27, 2023, the Financial Action Task Force (FATF) updated its lists of jurisdictions under increased monitoring and jurisdictions subject to a call for action. The lists are reviewed during the FATF plenary meetings and adjusted in response to the FATF’s findings, as well as global, political and economic developments.
Jurisdictions placed under increased monitoring are those 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 applying a risk-based approach that considers the information provided in the risk analysis performed by obliged entities.
Often, these jurisdictions commit to swiftly addressing the strategic deficiencies within agreed timeframes and are, as a result, subjected to increased monitoring. This list is commonly referred to as the “grey list.”
Of particular significance in the October update, Bulgaria has been added to the FATF list for increased monitoring whereas Albania, the Cayman Islands, Jordan, and Panama were removed from the list since its last version was published in June.
Jurisdictions identified with strategic deficiencies, placed by the FATF under increased monitoring as of October 2023, are:
- Burkina Faso
- 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 suspending 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 must 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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