October 16, 2008 FINTRAC Advisory

FINTRAC calls for increased vigilance when dealing with financial entities from Republic of Uzbekistan and Islamic Republic of Iran

In an October 16, 2008 statement, the Financial Action Task Force (FATF) confirmed the particular concerns it first expressed in its October 11, 2007 statement about the risk arising from deficiencies in the anti-money laundering / combating the financing of terrorism (AML/CFT) regime in the Islamic Republic of Iran. The FATF also expressed increased concerns, initially identified in its February 28, 2008 statement, about the actions taken by the Republic of Uzbekistan which effectively repeals its AML/CFT regime. The FATF calls 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 alerting all reporting entities that are 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 Iran and Uzbekistan.

Financial transactions emanating from, or destined to, Iran and Uzbekistan should be viewed by reporting entities as potentially suspicious and reporting entities are urged to exercise an enhanced level of scrutiny when dealing with transactions involving individuals and entities based in Iran and Uzbekistan. Reporting entities are also encouraged to undertake enhanced customer due diligence with respect to clients and beneficiaries involved in such transactions.

As well, the FATF confirmed concerns identified in its February 28, 2008 statement regarding vulnerabilities in the international financial system related to remaining deficiencies in AML/CFT regimes of Turkmenistan, Pakistan and Sao Tome and Principe. Finally, the FATF recognized the progress made in the northern part of Cyprus and will continue to monitor improvements to its AML/CFT regime.

The text of the FATF statement can be found at:
http://www.fatf-gafi.org

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:
www.osfi-bsif.gc.ca.