On 9 July 2020, the CSSF published Circular CSSF 20/746 (repealing Circular CSSF 20/738 of 6 March 2020) updating all professionals under the supervision of the CSSF on the recent statements made by the Financial Action Task Force (“FATF”) on jurisdictions identified with strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing.
High-risk jurisdictions on which enhanced due diligence and, where appropriate, counter-measures are imposed
Democratic People's Republic of Korea
The FATF maintains its position that the AML/CFT regime of the Democratic People's Republic of Korea ("DPRK") continues to have substantial and strategic deficiencies, requesting jurisdictions to take measures to close existing subsidiaries, branches or representative offices of DPRK banks, where applicable, within their respective territories.
The CSSF urges professionals to pay additional attention to business relationships and transactions with DPRK, including with companies and financial institutions from this jurisdiction and those acting on their behalf. The CSSF further emphasises the need for applying enhanced due diligence and monitoring measures to such business relationships and to inform the CSSF in case of a correspondent banking relationship with a credit institution from the DPRK.
Despite a political commitment in 2016 by Iran towards FATF to address its strategic AML/CFT deficiencies, it has not yet fully addressed them in full. For this reason, FATF will keep Iran on its list of countries with AML/CFT deficiencies until FATF is of the opinion that Iran has efficiently addressed such deficiencies identified by FATF.
Similar with the case of DPRK, CSSF urges professionals to continue taking into account the risks arising from the strategic deficiencies of the AML/CFT regime of Iran and to apply enhanced due diligence and monitoring measures to business relationships and transactions with this jurisdiction, including with companies and financial institutions from this jurisdiction and those acting on their behalf.
Moreover, the CSSF expects professionals to inform the former (i) in case of a correspondent banking relationship with a credit institution from Iran and (ii) in case of use of a third party located in Iran and conducting elements of the due diligence process (third-party introducers and/or outsourcing).
Jurisdictions under increased monitoring of the FATF
The FATF decided to remove Iceland and Mongolia from its list of countries with AML/CFT deficiencies as they demonstrated that substantial efforts have been made in addressing the deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing as identified by the FATF.
The following jurisdictions currently have strategic AML/CFT deficiencies for which they have developed an action plan with the FATF: Albania, Bahamas, Barbados, Botswana, Cambodia, Ghana, Jamaica, Mauritius, Myanmar, Nicaragua, Pakistan, Panama, Syria, Uganda, Yemen and Zimbabwe.
The CSSF requests professionals to consider, where appropriate, the deficiencies identified by the FATF in its statements and the risks arising from them for their business relationships and transactions with these jurisdictions.
Below are FATF's full decisions and statements: