What changed
RBI updated its earlier April 8, 2011 circular by incorporating FATF's June 24, 2011 statement, which calls for counter-measures against Iran and DPRK due to ongoing ML/FT risks. It also added a list of jurisdictions with strategic AML/CFT deficiencies that have not made sufficient progress, urging operators to consider these risks in business relationships.
What it means for you
Payment system operators must now apply enhanced due diligence for transactions involving Iran, DPRK, and the listed deficient jurisdictions. This does not prohibit legitimate trade with Iran but requires careful risk assessment. Operators need to update their AML/CFT policies and ensure compliance to avoid regulatory action.
What you must do
- Review and update AML/CFT policies to incorporate FATF's updated guidance on Iran, DPRK, and listed deficient jurisdictions.
- Conduct enhanced due diligence for all transactions and relationships with persons or entities from these countries.
- Ensure your nodal officer acknowledges receipt of this circular and maintains records.
- Train staff on identifying and reporting suspicious transactions linked to these high-risk jurisdictions.
Who it affects
All payment system operators authorized under the Payment and Settlement Systems Act, 2007, Nodal officers and principal officers of these operators, Compliance and AML/CFT teams within payment systems
Does this circular ban all transactions with Iran?
No, the circular explicitly states it does not preclude legitimate trade and business transactions with Iran. However, operators must apply counter-measures to protect the financial system from ML/FT risks.
Which countries are listed as having strategic AML/CFT deficiencies?
The FATF statement identifies Bolivia, Cuba, Ethiopia, Kenya, Myanmar, Sri Lanka, Syria, and Turkey as jurisdictions with deficiencies that have not made sufficient progress.
What action is required from the nodal officer?
The nodal officer or principal officer must acknowledge receipt of this circular, ensuring compliance with the advisory.