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FinCEN Updates List of Jurisdictions with Anti-Money Laundering and Counter – Terrorist Financing Deficiencies

The Financial Crimes Enforcement Network (FinCEN), on August 5, 2014, updated its list of jurisdictions with Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) deficiencies. U.S. Financial Institutions (FI) should review this update to ensure their compliance programs are adequate when conducting transactions in the identified countries.

This FinCEN Advisory is in response to decisions made on June 27, 2014 by the Financial Action Task Force (FATF), a 36-member intergovernmental policy making body that establishes international standards to combat money laundering and counter the financing of terrorism and proliferation of weapons of mass destruction. The United States is a member.

The FATF advised its members to apply countermeasures when dealing with Iran and North Korea and to apply Enhanced Due Diligence (EDD) for transactions involving Algeria, Ecuador, Indonesia, and Myanmar due to lack of progress in addressing AML/CFT deficiencies. As a reminder for FIs, EDD measures are described in 31 CFR §1010.610(b) and (c).

Additionally, the FATF has recognized Ethiopia, Pakistan, Syria, Turkey, and Yemen for their progress in substantially or largely addressing their FATF action plans and are now included in its “Improving Global AML/CFT Compliance: On-going Process” document. FIs should also be aware of a number of jurisdictions that have developed action plans with the FATF because of deficiencies in their AML/CFT regimes. These are Afghanistan, Albania, Angola, Argentina, Cambodia, Cuba, Ethiopia, Iraq, Kuwait, Lao PDR, Namibia, Nicaragua, Pakistan, Panama, Papua New Guinea, Sudan, Syria, Tajikistan, Turkey, Uganda, Yemen, and Zimbabwe.

Removed from the FATF-listing and monitoring process are Kenya, Kyrgyzstan, Mongolia, Nepal, and Tanzania. This is due to the significant progress these countries have made in addressing all or nearly all of their strategic AML/CFT deficiencies. When dealing with countries with action plans or those that have seen improvement, FIs are reminded to maintain their vigilance in accordance with 31 CFR §1010.610(a).

Clients should contact Crowell with any questions they might have on ensuring their compliance programs meet the requirements of the Bank Secrecy Act (BSA) for dealing with jurisdictions that have AML/CTF deficiencies.

Crowell & Moring LLP is an international law firm with approximately 550 lawyers representing clients in litigation and arbitration, regulatory and policy, and transactional matters. The firm is internationally recognized for its representation of Fortune 500 companies in high-stakes litigation, as well as its ongoing commitment to pro bono service and diversity, equity and inclusion. The firm has offices in Brussels, Doha, London, Los Angeles, New York, Orange County, San Francisco, Shanghai, and Washington, D.C.

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