What changed
FATF updated its statement on June 24, 2011, calling for counter-measures against Iran and DPRK due to ongoing ML/FT risks. It also flagged eight additional jurisdictions with strategic AML/CFT deficiencies that have not made sufficient progress. RBI now requires banks to consider these risks in business relationships and transactions.
What it means for you
Banks must enhance due diligence for transactions involving these countries to avoid regulatory penalties. The advisory does not ban legitimate trade with Iran but stresses risk assessment. Lenders should update their AML/CFT policies and train staff on these heightened-risk jurisdictions.
What you must do
- Review and update AML/CFT risk assessments to include Iran, DPRK, and the seven listed jurisdictions.
- Apply enhanced due diligence for transactions and relationships with entities from these countries.
- Ensure Principal Officer acknowledges receipt of this circular and disseminates it to relevant teams.
- Monitor FATF updates regularly for changes in the list of high-risk jurisdictions.
Who it affects
All Scheduled Commercial Banks (excluding RRBs), Local Area Banks, All India Financial Institutions
Which countries are newly flagged for strategic AML/CFT deficiencies?
Bolivia, Cuba, Ethiopia, Kenya, Myanmar, Sri Lanka, Syria, and Turkey. These jurisdictions have not made sufficient progress in addressing deficiencies.