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FinCEN Issues Advisory on FATF-Identified Jurisdictions with AML/CFT Deficiencies

FinCEN issued an Advisory regarding changes to the Financial Action Task Force's ("FATF") lists of jurisdictions with strategic Anti-Money Laundering and Counter-Terrorist Financing ("AML/CFT") deficiencies. These changes affect the due diligence obligations of U.S. financial institutions.

First, the Advisory announced the removal of Kenya and Tanzania from the FATF list of jurisdictions subject to countermeasures or enhanced due diligence. The Advisory explained that the status of these countries was changed because they have made "significant progress to address their FATF-identified strategic AML/CFT deficiencies." Iran and North Korea remain the only jurisdictions on the list subject to countermeasures, while Algeria, Ecuador, Ethiopia, Indonesia, Myanmar, Pakistan, Syria, Turkey and Yemen remain subject to enhanced due diligence requirements. The Advisory reminded financial institutions of their enhanced due diligence obligations under the Bank Secrecy Act, including enhanced scrutiny of the correspondent accounts of banks in these jurisdictions.

Second, the Advisory announced the removal of three countries – Antigua and Barbuda, Bangladesh, and Vietnam – from the FATF list of jurisdictions having AML/CFT deficiencies (but which are not subject to countermeasures or enhanced due diligence). The Advisory commented that these three countries have addressed "all or nearly all of their strategic AML/CFT deficiencies." With respect to the 21 jurisdictions that remain on the list – including Kenya and Tanzania – the Advisory reminded financial institutions of their general due diligence obligations under 31 C.F.R. § 1010.610(a); i.e., "specific, risk-based, and, where necessary, enhanced policies, procedures and controls that are reasonably designed to detect and report known or suspected money laundering activity conducted through or involving any correspondent account established, maintained, administered, or managed in the United States."

See: FinCEN Advisory.

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