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FinCEN Updates List of Jurisdictions with AML/CFT Regime Deficiencies

FinCEN notified U.S. financial institutions that the Financial Action Task Force ("FATF") updated the list of jurisdictions with strategic deficiencies in combating anti-money laundering and countering the financing of terrorism ("AML/CFT"). Changes to the FATF list may affect U.S. financial institutions' due diligence obligations and risk-based approaches concerning the affected jurisdictions.

The FinCEN Advisory Notice reported that in June 2016, the FATF conditionally suspended counter-measures against Iran for a period of 12 months, thereby removing Iran from Category A ("Countermeasures") and placing the jurisdiction in Category B ("Enhanced Due Diligence"). In addition, the Advisory stated that due to the lack of effective implementation of an AML/CFT framework, Ethiopia was added to the listing and monitoring process. Ethiopia is the first country to be so identified based on the results of a 2012 FATF mutual evaluation methodology. The 2012 evaluation assessed technical compliance with FATF Standards, as well as the effectiveness of a given country's AML/CFT regime.

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