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FATF Jurisdiction Risks for MTSS Agents

Current · Source: Reserve Bank of India · RBI/2010-11/322 · issued 22 Dec 2010 · ~1 min read
Quick answerRBI directs MTSS Indian Agents to factor in FATF-identified AML/CFT deficiencies of certain jurisdictions when handling cross-border inward remittances, referencing FATF's June 2010 statement.
The rule, in the simplest words
How it plays out — a real example

Rahul, a money‑transfer agent in Mumbai, receives a remittance from a client in a FATF‑listed country. He checks the FATF list, applies extra due‑diligence steps, and reports the transaction to his Principal Officer, ensuring the bank stays compliant and avoids penalties.

What changed

RBI reiterated that MTSS agents must consider risks from jurisdictions with strategic AML/CFT deficiencies as per FATF statements. It specifically referenced FATF's June 25, 2010 statement and advised agents to review the enclosed information.

What it means for you

Banks acting as MTSS agents must update their risk assessment frameworks to include FATF-identified high-risk jurisdictions. This ensures compliance with PMLA obligations and avoids penal action under FEMA or PMLA for non-compliance.

What you must do

Who it affects

Authorised Persons (Indian Agents) under Money Transfer Service Scheme, Principal Officers of MTSS agents, Compliance teams handling cross-border inward remittances

❓ Common questions

What is the key requirement from this circular?

MTSS agents must consider AML/CFT deficiencies of jurisdictions identified by FATF in its June 2010 statement when processing cross-border inward remittances.

What are the consequences of non-compliance?

Non-compliance attracts penal provisions under FEMA, 1999, and PMLA, 2002, as amended, along with related rules.

📜 Read the original circular — full text as issued by RBI
RBI/2010-11/322 A.P. (DIR Series) Circular No. 28 A.P. (FL Series) Circular No. 09 December 22, 2010 To, All Authorised Persons, who are Indian Agents under Money Transfer Service Scheme. Madam/ Sir Know Your Customer (KYC) norms/Anti-Money Laundering (AML) standards/Combating the Financing of Terrorism (CFT)/Obligation of Authorised Persons under Prevention of Money Laundering Act, (PMLA), 2002, as amended by Prevention of Money Laundering (Amendment) Act, 2009- Cross Border Inward Remittance under Money Transfer Service Scheme Attention of all the Authorised Persons, who are Indian Agents under Money Transfer Service Scheme (MTSS) is invited to Paragraph 5.10 (b) of Annex-I, Annex to A.P. (DIR Series) Circular No.18 {A.P. (FL Series) Circular No.5} dated November 27, 2009 in terms of which Authorised Persons (Indian Agents) were advised to take into account risks arising from the deficiencies in AML/CFT regime of certain jurisdictions, as identified in FATF Statement (www.fatf-gafi.org) issued from time to time, while dealing with individuals from these jurisdictions. 2. As part of its ongoing review of compliance with the AML/CFT standards, the Financial Action Task Force (FATF) has identified certain jurisdictions which have strategic AML/CFT deficiencies. 3. FATF, vide its statement dated June 25, 2010 ( copy enclosed ) has called upon jurisdictions listed in the statement to complete the implementation of their action plan within the timeframe. The FATF, in the statement has called upon its members to consider the information given in the statement. 4. All Authorised Persons (Indian Agents) are accordingly advised to consider the information contained in the enclosed statement. 5. Authorised Persons (Indian Agents) may bring the contents of this circular to the notice of their constituents concerned. 6. Please advise your Principal Officer to acknowledge receipt of this circular letter. 7. The directions contained in this Circular have been issued under Sections 10(4) and Section 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and also under the Prevention of Money Laundering Act, (PMLA), 2002, as amended by Prevention of Money Laundering (Amendment) Act, 2009 and Prevention of Money-Laundering (Maintenance of Records of the Nature and Value of Transactions, the Procedure and Manner of Maintaining and Time for Furnishing Information and Verification and Maintenance of Records of the Identity of the Clients of the Banking Companies, Financial Institutions and Intermediaries) Rules, 2005 as amended from time to time. Non-compliance with the guidelines would attract penal provisions of the Acts concerned or Rules made there under. Yours faithfully, (Salim Gangadharan) Chief General Manager-in-Charge
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2010-11/322 · issued 22 Dec 2010. The plain-English explanation above is BankPulse’s own independent summary.
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Worked example & action-note template

Example: if you are a Compliance officer at a bank this circular applies to (Authorised Persons (Indian Agents) under Money Transfer Service Scheme, Principal Officers of MTSS agents, Compliance teams handling cross-border inward remittances), your first concrete step on “FATF Jurisdiction Risks for MTSS Agents” is: “Review the enclosed FATF statement dated June 25, 2010, and update your AML/CFT risk assessments accordingly.” (RBI issued this 22 Dec 2010).

  1. Circular: RBI/2010-11/322 -- FATF Jurisdiction Risks for MTSS Agents
  2. Issued: 22 Dec 2010
  3. Action required: Review the enclosed FATF statement dated June 25, 2010, and update your AML/CFT risk assessments accordingly.
  4. Action required: Advise your Principal Officer to acknowledge receipt of this circular.
  5. Action required: Communicate the circular's contents to all relevant constituents handling cross-border inward remittances under MTSS.
  6. Action required: Ensure enhanced due diligence for transactions involving individuals from FATF-listed jurisdictions.
  7. Owner: ____________ Target date: ____________
  8. Board/committee approval needed? Y / N
  9. Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.

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Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=6159&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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