FinCEN Updates Jurisdictions on FATF AML/CFT Deficiencies List

Christian Larson Commentary by Christian Larson

FinCEN updated its list of Financial Action Task Force ("FATF")-identified jurisdictions with strategic AML and Combating the Financing of Terrorism ("AML/CFT") deficiencies.

The following changes were made to the "Jurisdictions under Increased Monitoring" list:

  • The Bahamas were removed from the list after a determination that the jurisdiction has implemented reforms to its AML/CFT regimes; and
  • Burkina Faso, the Cayman Islands, Morocco and Senegal were added to the list after a determination that there is a lack of effective implementation of the countries' AML/CFT frameworks. However, FinCEN stated that all of these countries have made "high-level political commitments" to strengthen their AML/CFT regimes.

The countries that remain on the list are Albania, Barbados, Botswana, Burma (Myanmar), Cambodia, Ghana, Jamaica, Mauritius, Nicaragua, Pakistan, Panama, Syria, Uganda, Yemen and Zimbabwe. FinCEN noted that Barbados and Jamaica - citing the COVID-19 pandemic - did not report to the FATF, so their inclusion on the list may not reflect the most recent status of the jurisdictions' AML/CFT regime.

FinCEN confirmed that the FATF's February 2020 statement, "High-Risk Jurisdictions Subject to a Call for Action," which called for enhanced due diligence and countermeasures with respect to the Democratic People's Republic of Korea and Iran, remains in effect.


Christian Larson

The inclusion of the Cayman Islands on the FATF's and FinCEN's lists may result in the Cayman Islands more aggressively enforcing its AML laws and regulations. Cayman enforcement agencies are particularly likely to focus on whether legal entities are filing accurate, adequate, and up-to-date beneficial ownership information with Cayman authorities. Structures that involve Cayman entities may wish to examine 1) whether a structure's Cayman entities are within the scope of the Cayman Islands' beneficial ownership reporting requirements, 2) whether foundational and deal documents permit the collection and disclosure of adequate information regarding beneficial owners, and 3) whether, where required, adequate disclosures are in fact being made to Cayman authorities.

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