Sanctions Tag

by Andria Papageorgiou

Financial Action Task Force Statement Publications – February 2023

Paris, 24 February 2023 – The second Plenary of the FATF under the Presidency of T. Raja Kumar of Singapore concluded on 24/2/2023. Delegates from over 200 jurisdictions of the Global Network participated in these discussions at the FATF headquarters in Paris.

Following the statements issued since March 2022, the FATF reiterates that all jurisdictions should be vigilant to current and emerging risks from the circumvention of measures taken against the Russian Federation in order to protect the international financial system. The outcomes of the FATF Plenary, 22-23 February 2023 relate among others to the following matters:

FATF Statement on High-Risk Jurisdictions subject to a Call for Action:

Following FAFT’s statement of October 2022 on the list of “High-Risk Jurisdictions subject to a Call for Action- October 2022”, the latter proceeded with the issuance of a Publication on the 24^th of February 2023, through which it urges all jurisdictions to apply enhanced due diligence, and, in the most serious cases, countries are called upon to apply counter-measures to protect the international financial systems from the money laundering, terrorist financing, and proliferation financing (the “ML/TF/PF”) risks emanating from the country. In particular, the FATF’s call for action on the following high-risk jurisdictions remains in effect:

A. Jurisdictions subject to a FATF call on its members and other jurisdictions to apply countermeasures.

• • Democratic People’s Republic of Korea (DPRK)
  • Iran

 B. Jurisdiction subject to a FATF call on its members and other jurisdictions to apply enhanced due diligence measures proportionate to the risks arising from the jurisdiction.

• • Myanmar

FATF Statement on Jurisdictions under Increased Monitoring:

On the 24^th of February 2023, the FAFT issued a Publication in relation to the results of the progress review to identify new countries with strategic AML/CFT deficiencies, despite the challenged posed by Covid-19, based on which:

A. Jurisdictions no longer subject to increased monitoring:

• • Cambodia
  • Morocco

B. Jurisdictions with strategic deficiencies:

• • Albania
  • Barbados
  • Burkina Faso
  • The Cayman Islands
  • (*) Democratic Republic of the Congo
  • Gibraltar
  • Haiti
  • Jamaica
  • Jordan
  • Mali
  • (*) Mozambique
  • Nigeria (new)
  • Panama
  • Philippines
  • Senegal
  • South Africa (new)
  • South Sudan
  • Syria
  • (*) Tanzania
  • Turkey
  • Uganda
  • United Arab Emirates
  • Yemen

 * Chose to defer reporting; thus, the relevant Statements available, issued in October 2022 may not necessarily reflect the most recent status of the jurisdictions’ AML/CFT regimes.

FATF Statement on the Russian Federation:

On the 24^th of February 2023, the FAFT issued a Statement in relation to its decision to suspend the membership of the Russian Federation, as the latter’s continuing and intensifying war of aggression against Ukraine runs counter to FATF’s core principles aiming to promote security, safety and the integrity of the global financial system. In particular, Russian Federation can no longer hold any leadership or advisory roles or take part in decision-making on standard-setting, FATF peer review processes, governance, and membership matters.

Other matters:

• Mutual Evaluation Reports: FATF has adopted a mutual evaluation report of Indonesia and Qatar that will be published by May 2023 following the completion of its quality and consistency review.
• Beneficial Ownership of Legal Persons: FATF Plenary has finalised a guidance document which will help countries implement the revised requirements of Recommendation 24 which requires countries to ensure that beneficial ownership information is held by a public authority or body functioning as a beneficial ownership registry or an alternative mechanism they will use to enable efficient access. The guidance will be published in March 2023.
• Beneficial Ownership of Legal Arrangements: FATF Plenary also agreed on enhancements to Recommendation 25 on legal arrangements to bring its requirements broadly in line with those for Recommendation 24 on legal persons to ensure a balanced and coherent set of FATF standards on beneficial ownership.
• Disrupting the financial flows from ransomware: FATF completed research that analyses the methods that criminals use to carry out their ransomware attacks and how they launder ransom payments. Relevant research will be published in March 2023 and will include a list of risk indicators that can help public and private sector entities identify suspicious activities related to ransomware.
• Improving implementation of FATF requirements for virtual assets and virtual asset service providers: Plenary agreed on a roadmap to strengthen the implementation of FATF Standards on virtual assets and virtual asset service providers, which will include a stocktake of current levels of implementation across the global network. In the first half of 2024, the FATF will report on steps FATF members and FSRB countries with materially important virtual asset activity have taken to regulate and supervise virtual asset service providers.
• Money Laundering and Terrorist Financing in the Art and Antiquities Markets: FATF has also finalised a report that explores the link between money laundering and art and antiquities which was published on the 27^th of February 2023.

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