Corporate Governance

Intergovernmental agency adds countries to money-laundering ‘gray list’

Finance departments should take extra precautions when dealing with these high-risk countries.
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There are several new countries that compliance officers and finance departments will have to take extra caution with after the Financial Action Task Force (FATF) recently updated its list of jurisdictions at high risk of money laundering and terrorism financing.

Late last month, FATF, an intergovernmental global money-laundering and terrorist-funding watchdog, added Myanmar to the list of countries considered to be “non-cooperative…in efforts to combat money laundering and the financing of terrorism,” joining Iran and North Korea.

The Democratic Republic of the Congo, Tanzania, and Mozambique were also added to the FATF “gray list,” a compilation of countries considered to have “strategic deficiencies” in their anti-money laundering efforts (AML), countering the financing of terrorism (CFT), and countering the financing of proliferation of weapons of mass destruction (CPF) regimes. Nicaragua and Pakistan were removed from the gray list after improving their AML/CFT/CPF rules.

The FATF collects and analyzes AML/CTF/CPF risk assessments and weighs them against recommended standards. Jurisdictions that fall short of the standards can land on the gray or black list.

US banks and financial institutions are required by law to have strict AML policies and procedures. However, non-regulated, non-financial businesses can run afoul of federal AML regulations, potentially triggering government-enforcement actions.—DA

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