What changed
RBI forwarded FATF's October 2010 statement classifying Iran as requiring countermeasures due to substantial ML/FT risks, and DPRK as having strategic deficiencies without an action plan. Payment system entities must now consider these risks in business relationships and transactions.
What it means for you
Banks and payment operators must enhance due diligence for any transaction or relationship involving Iran or DPRK. This aligns with global FATF standards and previous RBI circulars, reinforcing the need to protect India's financial system from cross-border illicit flows.
What you must do
- Update AML/CFT risk assessments to include heightened risks from Iran and DPRK.
- Apply enhanced due diligence for transactions or relationships with persons/entities from these jurisdictions.
- Ensure nodal/principal officers acknowledge receipt of this circular.
- Refer to earlier RBI circular DBOD.AML.No.1930/14.01.036/2009-10 for additional guidance.
Who it affects
All authorised payment system operators in India, Banks handling cross-border transactions, Compliance and AML/CFT teams
What are the two categories of jurisdictions mentioned in this circular?
Iran is subject to FATF countermeasures due to ongoing ML/FT risks. DPRK has strategic deficiencies and has not committed to an action plan as of October 2010.
Do I need to stop all transactions with Iran and DPRK?
No, but you must assess and mitigate the risks arising from their deficient AML/CFT regimes before entering into any business relationship or transaction.
Is this a new requirement?
No, it supplements earlier RBI guidance from August 2010 (circular DBOD.AML.No.1930/14.01.036/2009-10) and aligns with FATF updates.