What changed
FATF issued a statement on October 22, 2010, dividing deficient jurisdictions into two groups: Iran, subject to countermeasures, and DPRK, with unaddressed deficiencies. RBI now requires banks to consider these risks in business relationships and transactions.
What it means for you
Banks must enhance due diligence for any transactions or relationships involving Iran or DPRK to mitigate money laundering and terrorist financing risks. This may lead to stricter screening, reporting, or even rejection of such business.
What you must do
- Update AML/CFT policies to include enhanced scrutiny for Iran and DPRK-related transactions.
- Train staff on identifying and reporting transactions linked to these jurisdictions.
- Ensure Principal Officer acknowledges receipt of this circular.
- Review existing relationships with entities from Iran and DPRK for compliance.
Who it affects
All Scheduled Commercial Banks (excluding RRBs), Local Area Banks, All India Financial Institutions
What are the two groups of jurisdictions mentioned in the FATF statement?
Iran is subject to countermeasures due to substantial ML/FT risks, while DPRK has strategic deficiencies without a committed action plan.
Do we need to stop all business with Iran and DPRK?
No, but you must assess and mitigate risks from these jurisdictions in all business relationships and transactions.