What changed
FATF released an updated public statement and compliance document on October 19, 2012, revising its earlier guidance on AML/CFT deficiencies in certain jurisdictions. RBI now requires all payment system operators to consider this updated information in their risk assessments.
What it means for you
Banks and payment operators must align their AML/CFT screening processes with FATF's latest list of high-risk and non-cooperative jurisdictions. While legitimate transactions remain allowed, enhanced due diligence may be needed for counterparties from those countries.
What you must do
- Review FATF's October 2012 statement and update your AML/CFT risk assessment frameworks accordingly.
- Ensure your compliance team screens transactions and counterparties against the updated list of high-risk jurisdictions.
- Acknowledge receipt of this circular through your Nodal Officer or Principal Officer.
- Do not block legitimate trade; apply proportionate enhanced due diligence where needed.
Who it affects
All payment system operators authorized under the Payment and Settlement Systems Act, 2007, Banks offering payment services, Compliance and AML/CFT teams at financial institutions
Does this circular ban transactions with the listed jurisdictions?
No. The circular explicitly states it does not preclude legitimate trade and business transactions with those countries and jurisdictions.
What should I do if my institution has exposure to a high-risk jurisdiction?
Apply enhanced due diligence as per your AML/CFT policy, referencing FATF's updated statement, and ensure compliance with RBI's existing guidelines.