FINTRAC calls for continued vigilance when dealing with financial entities from the Islamic Republic of Iran and the Democratic People's Republic of Korea
In order to protect the international financial system from money laundering and terrorist financing risks, the Financial Action Task Force (FATF) issued two statements on February 16, 2012.
Islamic Republic of Iran and the Democratic People's Republic of Korea
In its February 16, 2012 Public Statement, the FATF re-affirmed the particular and exceptional concerns it first expressed in its October 2007 statement about the risk arising from deficiencies in the AML/CFT regime in the Islamic Republic of Iran. The FATF also re-affirmed the concerns it expressed for the first time in its February 2010 statement with respect to the risk arising from deficiencies in the AML/CFT regime in the Democratic People's Republic of Korea. The FATF reaffirmed the call on its members to strengthen preventive measures to protect their financial sectors from such risks.
Accordingly, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) is reiterating to all reporting entities subject to the requirements of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, to the risk of doing business with individuals and entities based in or connected to Iran and the Democratic People's Republic of Korea.
FINTRAC is advising that reporting entities consider the above when deciding whether to file a suspicious transaction report in respect of financial transactions emanating from, or destined to Iran or the Democratic People's Republic of Korea. Reporting entities are also encouraged to undertake enhanced customer due diligence with respect to clients and beneficiaries involved in such transactions.
Jurisdictions Representing a Risk Arising from Deficiencies
In its February 16, 2012 Public Statement, the FATF calls on its members to consider the risks arising from the strategic AML/CFT deficiencies associated with the following jurisdictions that have not made sufficient progress in addressing the deficiencies, or that have not committed to an action plan developed with the FATF to address the deficiencies: Bolivia, Burma (Myanmar), Ethiopia, Ghana, Indonesia, Kenya, Nigeria, Pakistan, Sao Tome and Principe, Sri Lanka, Syria, Tanzania, Thailand, and Turkey.
In addition, the FATF has continued to identify Cuba as having strategic deficiencies in its AML/CFT regime that pose a risk to the international financial system. Cuba has not committed to the FATF's AML/CFT international standards and has not engaged with the FATF on its deficiencies.
FINTRAC is advising that reporting entities should consider giving special attention to transactions related to Bolivia, Burma (Myanmar), Ethiopia, Ghana, Indonesia, Kenya, Nigeria, Pakistan, Sao Tome and Principe, Sri Lanka, Syria, Tanzania, Thailand, Turkey and Cuba.
In its February 16, 2012 Compliance Statement, the FATF brought to the attention of its members several jurisdictions that have strategic AML/CFT deficiencies. The following jurisdictions have developed an action plan with the FATF but the FATF is not yet satisfied that they have made sufficient progress on their action plan to address identified deficiencies: Ecuador, Philippines, Vietnam, and Yemen. If these jurisdictions do not take sufficient action to implement significant components of their action plan by June 2012, then the FATF will identify them as being out of compliance with their agreed action plans and will take the additional step of calling upon its members to consider the risks arising from the deficiencies associated with each jurisdiction.
The following jurisdictions have also developed an action plan with the FATF to address identified deficiencies and demonstrated some progress with the execution of their plans: Algeria, Angola, Antigua and Barbuda, Argentina, Bangladesh, Brunei Darussalam, Cambodia, Kyrgyzstan, Mongolia, Morocco, Namibia, Nepal, Nicaragua, Sudan, Tajikistan, Trinidad and Tobago, Turkmenistan, Venezuela, and Zimbabwe.
Honduras and Paraguay No Longer Subject to FATF Monitoring Process
The FATF welcomed Honduras' and Paraguay's significant progress in improving their AML/CFT regime. Both Honduras and Paraguay have largely met their commitments in their Action Plan regarding the strategic deficiencies that the FATF had identified. Honduras and Paraguay are therefore no longer subject to the FATF's monitoring process.
The FATF February 16, 2012 Public Statement and Compliance Statement can be found at the following website:
Canada is a member of the FATF and strongly supports its efforts to combat money laundering and terrorist financing.
The Office of the Superintendent of Financial Institutions (OSFI) has also issued a Notice to all federally regulated financial institutions. For a copy of the Notice, visit: