What changed
RBI updated its earlier April 2010 circular by incorporating FATF's June 25, 2010 statement. The statement divides deficient jurisdictions into two groups: Iran (subject to countermeasures) and DPRK and Sao Tome and Principe (with unresolved deficiencies). UCBs must now factor these risks into business relationships and transactions.
What it means for you
UCBs must treat Iran with the highest caution, potentially applying countermeasures like enhanced due diligence or transaction restrictions. For DPRK and Sao Tome and Principe, banks need to evaluate risks individually. Compliance officers must acknowledge receipt to the regional RBI office, ensuring regulatory tracking.
What you must do
- Review and update KYC/AML policies to include FATF's June 2010 classification of Iran, DPRK, and Sao Tome and Principe.
- Apply enhanced due diligence or countermeasures for transactions involving Iran, as per FATF call.
- Assess and document risks for business relationships with entities from DPRK and Sao Tome and Principe.
- Ensure compliance officer acknowledges this circular to the respective RBI regional office.
Who it affects
AD I Category Urban Co-operative Banks, Compliance officers and principal officers of UCBs, Branches handling cross-border transactions with listed jurisdictions
What are the two groups of jurisdictions mentioned in the circular?
Group 1: Iran, where FATF calls for countermeasures. Group 2: DPRK and Sao Tome and Principe, which have strategic deficiencies but no committed action plan as of June 2010.
Do UCBs need to report compliance to RBI?
Yes, the compliance officer or principal officer must acknowledge receipt of this circular to the concerned RBI regional office.