February 26, 2010 FINTRAC Advisory

FINTRAC calls for increased vigilance when dealing with financial entities from the Islamic Republic of Iran.

FINTRAC calls for special attention to transactions related to Pakistan, Turkmenistan, Sao Tome and Principe, Angola, Democratic People's Republic of Korea, Ecuador and Ethiopia.

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 18, 2010 identifying jurisdictions that have strategic deficiencies in their anti-money laundering / combating the financing of terrorism (AML/CFT) regime.

Islamic Republic of Iran

In its February 18, 2010 statement, the FATF re-affirmed the particular concerns it first expressed in its October 11, 2007 statement about the risk arising from deficiencies in the AML/CFT regime in the Islamic Republic of Iran. 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.

FINTRAC is advising that reporting entities should consider the above when deciding whether to file a suspicious transaction report in respect of financial transactions emanating from, or destined to Iran. Reporting entities are also encouraged to undertake enhanced customer due diligence with respect to clients and beneficiaries involved in such transactions.

Pakistan, Turkmenistan, Sao Tome and Principe, Angola, Democratic People's Republic of Korea, Ecuador and Ethiopia.

The FATF also re-affirmed the concerns it expressed for the first time in its February 2008 statement related to the strategic deficiencies of the AML/CFT regime in Pakistan, Turkmenistan and Sao Tome and Principe.

As well, the FATF identifies for the first time jurisdictions with strategic deficiencies that have not committed to an action plan to address such deficiencies. Those jurisdictions are: Angola, Democratic People's Republic of Korea, Ecuador and Ethiopia.

Accordingly, FINTRAC is advising that reporting entities should consider giving special attention to transactions related to the above mentioned jurisdictions.

Other Jurisdictions

The FATF also brought to the attention of its members several jurisdictions that have developed an action plan with the FATF to address identified strategic deficiencies. Those jurisdictions are: Antigua and Barbuda, Azerbaijan, Bolivia, Burma (Myanmar), Greece, Indonesia, Kenya, Morocco, Nepal, Nigeria, Paraguay, Qatar, Sri Lanka, Sudan, Syria, Trinidad and Tobago, Thailand, Turkey, Ukraine, and Yemen.

Finally, in February 2008, the FATF had expressed concerns related to deficiencies with the regime in the Republic of Uzbekistan. The FATF now recognized the progress made and the Republic of Uzbekistan is no longer subject to the FATF's enhanced monitoring process.

The text of the two FATF statements 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