Due Diligence

The Financial Action Task Force (“FATF”), the global standard-setting body for anti-money laundering and combating the financing of terrorism (“AML/CFT”), published the following documents on 21 October 2022:

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

(a)    Democratic People’s Republic of Korea (“DPRK”) and Iran
 

• Since February 2020, in light of the COVID-19 pandemic, the FATF has paused the review process for DPRK and Iran given that they are already subject to the FATF’s call for countermeasures.  The FATF therefore asks member jurisdictions to refer to the Statement on High-Risk Jurisdictions adopted in February 2020 (“the Statement”) (http://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/call-for-action-february-2020.html). While the Statement may not necessarily reflect the most recent status of AML/CFT regime in the DPRK and Iran, the FATF’s call for action on these high-risk jurisdictions remains in effect.

      DPRK

• The FATF calls on its members and urges all jurisdictions, which we hereby do, to advise you to give special attention to business relationships and transactions with the DPRK, including DPRK companies, Financial Institutions and those acting on their behalve.

      Iran

• The FATF calls on its members and urges all jurisdictions to apply effective counter-measures, which we hereby do, and advise you to apply enhanced due diligence measures, including obtaining information on the reasons for intended transactions, business relationships and transactions with natural and legal persons from Iran; conducting enhanced monitoring of business relationships, by increasing the number and timing of controls applied, and selecting patterns of transactions that need further examination.

(b)  Myanmar

• The FATF calls on its members and all jurisdictions to apply enhanced due diligence measures proportionate to the risk arising from Myanmar, which we hereby do, and advise you to apply enhanced due diligence measures to business relations and transactions with Myanmar.

(2)  Jurisdictions under Increased Monitoring:
 

• As part of its ongoing review of compliance with the AML/CFT standards, FATF identified 23 jurisdictions with strategic AML/CFT deficiencies:Albania, Barbados, Burkina Faso, Cambodia, Cayman Islands, Democratic Republic of the Congo, Gibraltar, Haiti, Jamaica, Jordan, Mali, Morocco, Mozambique, Panama, Philippines, Senegal, South Sudan, Syria, Tanzania, Turkey, Uganda, the United Arab Emirates and Yemen
• Nicaragua and Pakistan are no longer subject to the FAFT’s increased monitoring process for the significant progress in improving their AML/CFT regime.
• The FATF encourages members and all jurisdictions to consider the information presented in the 21 October 2022 issue of “Jurisdictions under Increased Monitoring” which sets out the high-level political commitment provided by each of the jurisdictions in question to address the identified deficiencies, including to (i) ensure the timely access to adequate, accurate and current basic and beneficial ownership information; (ii) implement an effective targeted financial sanctions regime related to terrorist financing and proliferation financing; (iii) establish procedures to identify and freeze terrorist assets; (iv) apply a risk-based approach for monitoring non-profit organisations to prevent abuse for terrorist financing purposes; and (v) improve customer due diligence and suspicious transaction reporting requirements, etc.

You are suggested to conduct a due diligence on your suppliers/customers/counterparties to ensure that they do not fall under FATF's recommendation.

Please do not hesitate to contact us at below for details:

Whatsapp : (852) 6499 4686

Phone : (852) 2186 6936

Email : info@intershores.hk

Disclaimer:

Whilst reasonable care has been taken in provision of information above, it does not constitute legal or other professional advice. INTERSHORES does not accept any responsibility, legal or otherwise, for any error omission and accepts no responsibility for any financial or other loss or damage that may result from its use.  In particular, readers are advised to take appropriate professional advice before committing themselves to any involvement in jurisdictions, vehicles or practice..