FATF Improving Global AML/CFT Compliance: On-going Process - 19 October 2018
20 October 2018, Bachir El Nakib (CAMS), Senior Consultant, Compliance Alert (LLC, Lebanon-Qatar)
Paris, France, 19 October 2018 - As part of its ongoing review of compliance with the AML/CFT standards, the FATF identifies the following jurisdictions that have strategic AML/CFT deficiencies for which they have developed an action plan with the FATF. While the situations differ among each jurisdiction, each jurisdiction has provided a written high-level political commitment to address the identified deficiencies. The FATF welcomes these commitments.
A number of jurisdictions have not yet been reviewed by the FATF. The FATF continues to identify additional jurisdictions, on an ongoing basis, that pose a risk to the international financial system.
The FATF and the FATF-style regional bodies (FSRBs) will continue to work with the jurisdictions noted below and to report on the progress made in addressing the identified deficiencies. The FATF calls on these jurisdictions to complete the implementation of action plans expeditiously and within the proposed timeframes. The FATF will closely monitor the implementation of these action plans and encourages its members to consider the information presented below.
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Jurisdictions with strategic deficiencies |
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The Bahamas |
In October 2018, The Bahamas made a high-level political commitment to work with the FATF and CFATF to strengthen the effectiveness of its AML/CFT regime and address any related technical deficiencies. The Bahamas will work to implement its action plan to accomplish these objectives, including by:
(1) developing and implementing a comprehensive electronic case management system for international cooperation;
(2) demonstrating risk-based supervision of non-bank financial institutions;
(3) ensuring the timely access to adequate, accurate and current basic and beneficial ownership information;
(4) increasing the quality of the FIU’s products to assist LEAs in the pursuance of ML/TF investigations, specifically complex ML/TF and stand-alone ML investigations;
(5) demonstrating that authorities are investigating and prosecuting all types of money laundering, including complex ML cases, stand-alone money laundering, and cases involving proceeds of foreign offences;
(6) demonstrating that confiscation proceedings are initiated and concluded for all types of ML cases; and
(7) addressing gaps in the TF and PF TFS frameworks and demonstrating implementation.
In October 2018, Botswana made a high-level political commitment to work with the FATF and ESAAMLG to strengthen the effectiveness of its AML/CFT regime and address any related technical deficiencies. Botswana will work to implement its action plan to accomplish these objectives, including by:
(1) assessing the risks associated with legal persons, legal arrangements, and NPOs, and developing and implementing a risk-based comprehensive national AML/CFT strategy;
(2) developing and implementing risk-based AML/CFT supervisory manuals;
(3) improving its analysis and dissemination of financial intelligence by the FIU, and enhancing the use of financial intelligence among the relevant law enforcement agencies;
(4) developing and implementing CFT strategy, and ensuring the TF investigation capacity of the law enforcement agencies;
(5) ensuring the implementation without delay of targeted financial sanctions measures related to terrorist financing and proliferation financing, and
(6) applying a risk-based approach to monitoring non-profit organisations.
Since February 2017, when Ethiopia made a high-level political commitment to work with the FATF and ESAAMLG to strengthen its effectiveness and address any related technical deficiencies, Ethiopia has taken steps towards improving its AML/CFT regime, including by commencing risk-based supervision for DNFBPs and non-profit organisations (NPOs) and developing guidance for the identification, freezing and confiscation of assets. Ethiopia should continue to work on implementing its action plan to address its strategic deficiencies, including by establishing and implementing proliferation financing-related targeted financial sanctions.
In October 2018, Ghana made a high-level political commitment to work with the FATF and GIABA to strengthen the effectiveness of its AML/CFT regime and address any related technical deficiencies. Ghana will work to implement its action plan to accomplish these objectives, including by:
(1) developing and implementing a comprehensive national AML/CFT Policy based on the risks identified in the NRA, including measures to mitigate ML/TF risks associated with the legal persons;
(2) improving risk-based supervision, by enhancing the capacity of the regulators and the awareness of the private sector;
(3) ensuring the timely access to adequate, accurate and current basic and beneficial ownership information;
(4) ensuring the focused actions of the FIU in accordance with the risks identified by the NRA, and adequate resource allocation to the FIU;
(5) ensuring adequate and effective investigation and prosecution of TF; and
(6) applying a risk-based approach for monitoring non-profit organisations.
In June 2018, Pakistan made a high-level political commitment to work with the FATF and APG to strengthen its AML/CFT regime and to address its strategic counter-terrorist financing-related deficiencies. Pakistan will work to implement its action plan to accomplish these objectives, including by:
(1) demonstrating that TF risks are properly identified, assessed, and that supervision is applied on a risk-sensitive basis;
(2) demonstrating that remedial actions and sanctions are applied in cases of AML/CFT violations, and that these actions have an effect on AML/CFT compliance by financial institutions;
(3) demonstrating that competent authorities are cooperating and taking action to identify and take enforcement action against illegal money or value transfer services (MVTS);
(4) demonstrating that authorities are identifying cash couriers and enforcing controls on illicit movement of currency and understanding the risk of cash couriers being used for TF;
(5) improving inter-agency coordination including between provincial and federal authorities on combating TF risks;
(6) demonstrating that law enforcement agencies (LEAs) are identifying and investigating the widest range of TF activity and that TF investigations and prosecutions target designated persons and entities, and persons and entities acting on behalf or at the direction of the designated persons or entities;
(7) demonstrating that TF prosecutions result in effective, proportionate and dissuasive sanctions and enhancing the capacity and support for prosecutors and the judiciary; and
(8) demonstrating effective implementation of targeted financial sanctions (supported by a comprehensive legal obligation) against all 1267 and 1373 designated terrorists and those acting for or on their behalf, including preventing the raising and moving of funds, identifying and freezing assets (movable and immovable), and prohibiting access to funds and financial services;
(9) demonstrating enforcement against TFS violations including administrative and criminal penalties and provincial and federal authorities cooperating on enforcement cases;
(10) demonstrating that facilities and services owned or controlled by designated person are deprived of their resources and the usage of the resources.
Since February 2018, when Serbia made a high-level political commitment to work with the FATF and MONEYVAL to strengthen the effectiveness of its AML/CFT regime and address any related technical deficiencies, Serbia has taken steps towards improving its AML/CFT regime, including by: updating and communicating the results of its NRA; and demonstrating the investigation and prosecution of third-party and stand-alone ML. Serbia should continue to work on implementing its action plan to address its strategic deficiencies, including by:
(1) demonstrating that obligated entities have adequate risk mitigation-related requirements;
(2) subjecting lawyers to AML/CFT supervision in practice, integrating the results of institutional risk assessments into supervisory matrices, and demonstrating the timely and effective imposition of sanctions;
(3) demonstrating that competent authorities have timely access to beneficial ownership information regarding legal persons, and that such information is adequate, accurate, and current;
(4) demonstrating the implementation without delay of targeted financial sanctions measures related to terrorist financing and taking proportionate measures for non-profit organisations in line with a risk-based approach; and
(5) demonstrating the implementation without delay of targeted financial sanctions related to proliferation financing.
Since November 2017, when Sri Lanka made a high-level political commitment to work with the FATF and APG to strengthen the effectiveness of its AML/CFT regime and address any related technical deficiencies, Sri Lanka has taken steps towards improving its AML/CFT regime, including by providing case studies and statistics to demonstrate that competent authorities can obtain beneficial ownership information in relation to legal persons in a timely manner; issuing amendments to the directive in relation to CDD obligations; and establishing a targeted financial sanctions regime to implement relevant UNSCRs related to Iran and issuing a related directive. Sri Lanka should continue to work on implementing its action plan to address its strategic deficiencies, including by enhancing risk-based supervision high-risk DNFBPs, including through prompt and dissuasive enforcement actions and sanctions, as appropriate; and demonstrating effective implementation of its targeted financial sanctions obligations related to proliferation financing.
Since February 2010, when Syria made a high-level political commitment to work with the FATF and MENAFATF to address its strategic AML/CFT deficiencies, Syria has made progress to improve its AML/CFT regime. In June 2014, the FATF determined that Syria had substantially addressed its action plan at a technical level, including by criminalising terrorist financing and establishing procedures for freezing terrorist assets. While the FATF determined that Syria has completed its agreed action plan, due to the security situation, the FATF has been unable to conduct an on-site visit to confirm whether the process of implementing the required reforms and actions has begun and is being sustained. The FATF will continue to monitor the situation, and will conduct an on-site visit at the earliest possible date.
Since November 2017, when Trinidad and Tobago made a high-level political commitment to work with the FATF and CFATF to strengthen the effectiveness of its AML/CFT regime and address any related technical deficiencies, Trinidad and Tobago has taken steps towards improving its AML/CFT regime, including by enacting amendments to its Anti-Terrorism Act and legislation on criminal justice reforms which will speed up consideration of ML cases in courts. Trinidad and Tobago should continue to work on implementing its action plan to address its strategic deficiencies, including by:
(1) adopting and implementing the relevant measures to further enhance international cooperation;
(2) addressing issues related to transparency and beneficial ownership;
(3) completing the legislative efforts to enhance the processing of ML charges before the courts;
(4) taking measures to enhance tracing and confiscation of criminal proceeds;
(5) ensuring TFS are implemented without delay and implementing measures to monitor NPOs on the basis of risk; and
(6) developing, adopting, and implementing the necessary framework to counter proliferation financing.
Since November 2017, when Tunisia made a high-level political commitment to work with the FATF and MENAFATF to strengthen the effectiveness of its AML/CFT regime and address any related technical deficiencies, Tunisia has taken steps towards improving its AML/CFT regime, including by conducting outreach to the DNFBPs to raise their awareness of the AML/CFT obligations, and hiring and training financial analysts of the FIU. Tunisia should continue to work on implementing its action plan to address its strategic deficiencies, including by:
(1) fully integrating the DNFBPs into its AML/CFT regime;
(2) maintaining comprehensive and updated commercial registries and strengthening the system of sanctions for violations of transparency obligations;
(3) continuing to demonstrate increasing efficiency with regard to suspicious transaction report processing;
(4) demonstrating that its terrorism-related TFS regime is fully functional and that it is appropriately monitoring the association sector; and
(5) establishing and implementing proliferation finance-related targeted financial sanctions.
Since February 2010, when Yemen made a high-level political commitment to work with the FATF and MENAFATF to address its strategic AML/CFT deficiencies, Yemen has made progress to improve its AML/CFT regime. In June 2014, the FATF determined that Yemen had substantially addressed its action plan at a technical level, including by: (1) adequately criminalising money laundering and terrorist financing;
(2) establishing procedures to identify and freeze terrorist assets;
(3) improving its customer due diligence and suspicious transaction reporting requirements;
(4) issuing guidance;
(5) developing the monitoring and supervisory capacity of the financial sector supervisory authorities and the financial intelligence unit; and
(6) establishing a fully operational and effectively functioning financial intelligence unit. While the FATF determined that Yemen has completed its agreed action plan, due to the security situation, the FATF has been unable to conduct an on-site visit to confirm whether the process of implementing the required reforms and actions has begun and is being sustained. The FATF will continue to monitor the situation, and conduct an on-site visit at the earliest possible date.
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Public Statement, 19 October 2018