What changed
FATF updated its public statement and compliance document on June 21, 2013, regarding AML/CFT risks from certain jurisdictions. RBI communicated this update to all NBFCs, replacing the earlier April 18, 2013 circular on the same subject.
What it means for you
NBFCs must stay alert to FATF-identified high-risk jurisdictions to avoid AML/CFT compliance gaps. The circular does not ban transactions but expects enhanced due diligence for dealings with those countries.
What you must do
- Review the enclosed FATF statement and the linked documents for updated jurisdiction lists.
- Update your AML/CFT risk assessment frameworks to reflect the latest FATF findings.
- Ensure your compliance team monitors transactions with listed jurisdictions without disrupting legitimate trade.
- Maintain records of due diligence measures taken for any dealings with these countries.
Who it affects
All Non-Banking Financial Companies (NBFCs) excluding Residuary Non-Banking Companies, Compliance and risk management teams at NBFCs
Does this circular prohibit business with the listed jurisdictions?
No, the circular explicitly states it does not preclude NBFCs from legitimate trade and business transactions with those countries and jurisdictions.
What should NBFCs do with the FATF statement?
NBFCs are advised to consider the information in the FATF statement for their AML/CFT compliance processes, particularly regarding jurisdictions with deficiencies.