Overview

The FATF establishes international standards for anti-money laundering, countering the financing of terrorism, and countering the financing of proliferation of weapons of mass destruction (AML/CFT/CPF), which its member countries implement and enforce to varying degrees.

U.S. covered financial institutions and some designated non-financial businesses and professions (DNFBPs) should be mindful of heightened obligations when engaging in transactions with foreign financial institutions (FFIs) from Algeria, Angola, Côte d’Ivoire, Lebanon, and other FATF-listed jurisdictions.

In a press release following the grey list updates, the Financial Crimes Enforcement Network (FinCEN) reminded covered financial institutions of their due diligence obligations for FFI correspondent accounts. Due diligence programs for correspondent accounts for FFIs must include risk-based and, where necessary, enhanced procedures that are reasonably designed to enable detection and reporting of known or suspected money laundering activity involving any FFI correspondent account that is established, maintained, administered, or managed in the U.S. Financial institutions in the U.S. that bank with FFIs must be aware of the jurisdictions highlighted by FATF, FinCEN, and other regulators for sanctions as well as the risks under export control law and regulators, such as the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) and the U.S. Commerce Department’s Bureau of Industry and Security (BIS).¹

Obligations for accounts from grey-listed jurisdictions

The FATF’s grey list features 25 jurisdictions, now including Algeria, Angola, Côte d’Ivoire, and Lebanon.

When maintaining accounts for FFIs from grey-listed jurisdictions, U.S. financial institutions must carry out their due diligence obligations, potentially including transaction monitoring, using a risk-based approach. Specific transactions and transaction counterparties do not necessarily require enhanced due diligence, but do require consideration of the specific jurisdiction’s AML risks.

Obligations for accounts from black-listed jurisdictions

The FATF has made no changes to its black list of three high-risk jurisdictions: Iran, North Korea, and Burma.

Transactions and account maintenance for FFIs from black-listed jurisdictions are subject to stricter obligations. Covered financial institutions must apply enhanced due diligence, which obliges increased AML scrutiny, transaction monitoring, and identification of transactors and their beneficial owners. In some cases, the FATF and FinCEN also impose countermeasures which prohibit maintenance of any correspondent accounts and strictly limit financial relations with parties in black-listed jurisdictions. Countermeasures are currently in place for Iran and North Korea.