Gibraltar tagged for increased money laundering monitoring, Malta removed; Iran, North Korea still in crosshairs

The Mediterranean island nation of Malta has been removed from federal anti-money laundering monitoring, while the British overseas territory of Gibraltar (on the coast of southern Spain) is now under a closer eye, the Treasury’s financial law enforcement unit said Thursday.

Meanwhile, Iran and the Democratic People’s Republic of Korea (DPRK) remain under strict anti-money laundering restrictions, according to the Treasury Department’s Financial Crimes Enforcement Network (FinCEN).

FinCEN said for Gibraltar, an area under increased Financial Action Task Force (FATF) monitoring, financial institutions are reminded of their obligations to comply with the due diligence obligations for foreign financial institutions under U.S. anti-money laundering laws.

“Covered financial institutions should ensure that their due diligence programs, which address correspondent accounts maintained for 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 reminded.

Money services businesses (MSBs), the agency added, have parallel requirements with respect to foreign agents or foreign counterparties.

As for Iran and the DPRK, FinCEN said, “financial institutions must comply with the extensive U.S. restrictions and prohibitions against opening or maintaining any correspondent accounts, directly or indirectly, for North Korean or Iranian financial institutions. In the case of the DPRK and Iran, existing U.S. sanctions and FinCEN regulations already prohibit any such correspondent account relationships.”

Even though Malta is removed from monitoring, FinCEN still counseled caution. “U.S. financial institutions should take the FATF’s decisions and the reasons behind the delisting into consideration when assessing risk,” FinCEN said. “If a financial institution knows, suspects, or has reason to suspect that a transaction involves funds derived from illegal activity or that a customer has otherwise engaged in activities indicative of money laundering, terrorist financing, or other violation of federal law or regulation, the financial institution must file a Suspicious Activity Report (SAR).”

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