Agency updates lists of jurisdictions with strategic risk related to money laundering, financing of terrorism

The list of jurisdictions with strategic money laundering risks and financing of terrorism and weapons of mass destruction proliferation risks has been updated by Treasury’s top anti-money laundering unit and now includes Haiti, the Philippines and other jurisdictions.

According to the Financial Crimes Enforcement Network (FinCEN) and its Financial Action Task Force (FATF), Haiti, Malta, the Philippines, and South Sudan were added to the list; Ghana was removed.

“Covered financial institutions should ensure that their due diligence programs, which address correspondent accounts maintained for foreign financial institutions (FFIs), include appropriate, specific, risk-based, and, where necessary, enhanced policies, procedures, and controls that are reasonably designed to detect and report known or suspected money laundering activity conducted through or involving any correspondent account established, maintained, administered, or managed in the United States,” FinCEN said in a release.

The agency said money service businesses have “parallel requirements” that require them to establish “adequate and appropriate policies, procedures, and controls commensurate with the risk of money laundering and the financing of terrorism posed by their relationship with foreign agents or foreign counterparties.”

However, FinCEN went to some lengths to discourage financial institutions from “de-risking” in order to comply. The agency said the steps a financial institutions takes should not “put into question a financial institution’s ability to maintain or otherwise continue appropriate relationships with customers or other financial institutions; and should not be used as the basis to engage in wholesale or indiscriminate de-risking of any class of customers or financial institutions.

“Financial institutions should also refer to previous interagency guidance on providing services to foreign embassies, consulates, and missions,” the agency noted.

FinCEN, in its release, identified “financial institutions” as: casinos, depository institutions, the insurance industry, MSBs, mortgage co/broker, precious metals/jewelry industry, securities and futures agencies.

Financial Action Task Force Identifies Jurisdictions with Anti-Money Laundering and Combating the Financing of Terrorism and Counter-Proliferation Deficiencies