What changed
RBI issued a circular on April 27, 2010, referencing FATF's February 18, 2010 statement, which categorizes jurisdictions with strategic AML/CFT deficiencies into three groups: Iran (subject to countermeasures), Angola, DPRK, Ecuador, Ethiopia (no action plan committed), and Pakistan, Turkmenistan, Sao Tome and Principe (previously identified deficiencies remain). This updates the earlier December 10, 2009 circular.
What it means for you
RRBs must now assess and mitigate heightened money laundering and terrorist financing risks when dealing with entities or transactions linked to these jurisdictions. This may require enhanced due diligence, transaction monitoring, or reporting to ensure compliance with AML/CFT standards. Non-compliance could expose banks to regulatory action and reputational damage.
What you must do
- Update your AML/CFT risk assessment to include the listed jurisdictions: Iran, Angola, DPRK, Ecuador, Ethiopia, Pakistan, Turkmenistan, and Sao Tome and Principe.
- Consider the risks arising from AML/CFT deficiencies in these jurisdictions, and for Iran, apply countermeasures as called by FATF.
- Ensure your Principal Officer acknowledges receipt of this circular to the concerned RBI Regional Office.
Who it affects
Regional Rural Banks (RRBs), Principal Officers of RRBs, AML/CFT compliance teams
What are the three groups of jurisdictions mentioned in the FATF statement?
Group 1: Iran (subject to countermeasures). Group 2: Angola, DPRK, Ecuador, Ethiopia (no action plan committed). Group 3: Pakistan, Turkmenistan, Sao Tome and Principe (previously identified deficiencies remain).
What should RRBs do if they have transactions with these countries?
RRBs must consider the AML/CFT risks from these jurisdictions and apply appropriate measures, such as enhanced due diligence or countermeasures, especially for Iran.
Is acknowledgment of this circular mandatory?
Yes, the Principal Officer of the RRB must acknowledge receipt of this circular to the concerned RBI Regional Office.