The Discreet Science
International AML Watchdog Updates “Black List”
The Financial Action Task Force (FATF) added Ecuador, Yemen and Vietnam to the “black list,” a list of those countries that are high risk and non-cooperative in the global fight against money laundering and terrorist financing. The black list identifies jurisdictions with strategic deficiencies in their anti-money laundering and counter terrorist financing controls. Ecuador, Yemen and Vietnam join a list of 18 others.
Among the worst countries identified on the blacklist are Iran and the Democratic Republic of Korea. FATF is “call[ing] on its members and other jurisdictions to apply counter-measures to protect the international financial system from the on-going and substantial money laundering and terrorist financing risks” that emanate from these nations.
FATF is an intergovernmental anti-money laundering organization that combats money laundering and terrorist financing worldwide. The United States is one of the 33 nations that are members of the organization, which has developed a series of recommendations recognized as the international standard.
One jurisdiction that benefitted from the updated list was the Philippines, which FATF moved to its “gray list” which singles out countries that are making sufficient progress in their action plans. The Philippines had previously been on the “dark gray list” and would have slipped down into the black list if significant measures had not been taken. Other countries added to the gray list were Afghanistan, Albania and Kuwait.
No matter which list these countries appear on, the international financial community recognizes that all of these jurisdictions need significant improvement in the area of anti – money laundering and anti-terrorist financing controls. If you provide services or products to clients in any of these jurisdictions, you must ensure you have done an adequate, updated risk assessment to include the geographic risk. In addition, these companies should be considered a high-risk geography and as such transactions to and from should be appropriately monitored to identify potentially suspicious behavior.
K2 can work with you to mitigate these risks by assisting in developing and executing an enterprise wide risk assessment that measures inherent and residual risks for customer, products, services, geography and transactions. K2 also has subject matter experts that can assist in reviewing your current transaction-monitoring environment to ensure the proper risk assessments, parameters and thresholds are implemented.
