What changed
RBI issued a circular on March 17, 2011, referencing FATF's October 22, 2010 statement that categorizes Iran as requiring countermeasures and DPRK as having strategic deficiencies without an action plan. Banks must now consider these risks in business relationships and transactions.
What it means for you
Urban co-operative banks must enhance due diligence for transactions involving Iran or DPRK to mitigate money laundering and terrorist financing risks. This aligns with global FATF standards and may require additional monitoring or reporting.
What you must do
- Review and update AML/CFT policies to address risks from Iran and DPRK as per FATF guidance.
- Ensure compliance officers acknowledge receipt of this circular to the respective RBI regional office.
- Train staff on enhanced due diligence for transactions with persons or entities from these jurisdictions.
Who it affects
All AD Category I Primary (Urban) Co-operative Banks, Compliance officers and principal officers of these banks
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 an action plan, requiring risk consideration.
What action must banks take regarding these jurisdictions?
Banks must account for AML/CFT deficiencies when entering business relationships or transactions with persons or entities from Iran or DPRK.
Who needs to acknowledge receipt of this circular?
The Compliance Officer or Principal Officer of the bank must acknowledge receipt to the relevant RBI regional office.