The Financial Crimes Enforcement Network (FinCEN) has notified U.S. financial institutions about the recent statement issued by the Financial Action Task Force (FATF), an intergovernmental body setting 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). The FATF highlighted increasing financial connectivity between the Democratic People’s Republic of Korea (DPRK) and the international financial system, reiterating concerns over DPRK's failure to address significant AML/CFT deficiencies and threats posed by its illicit activities related to weapons proliferation.

To safeguard the international financial system, FATF urges all jurisdictions to remain vigilant and enforce countermeasures against DPRK.

The FATF also updated its list of jurisdictions with strategic AML/CFT/CPF deficiencies. U.S. financial institutions should consider these updates when reviewing their risk-based policies, procedures, and practices. On June 28, 2024, Monaco and Venezuela were added to the list of Jurisdictions Under Increased Monitoring while Jamaica and Türkiye were removed.

The High-Risk Jurisdictions Subject to a Call for Action list remains unchanged with Iran, DPRK, and Burma still subject to calls for action. Iran and DPRK are under FATF countermeasures while Burma is subjected to enhanced due diligence but not countermeasures.

As part of ensuring compliance with international standards, FATF released two statements: Jurisdictions Under Increased Monitoring—identifying those working on addressing strategic deficiencies—and High-Risk Jurisdictions Subject to a Call for Action—urging enhanced due diligence or countermeasures against significant risks from identified countries.

For jurisdictions under increased monitoring, U.S. covered financial institutions must comply with due diligence obligations under 31 CFR § 1010.610(a) in addition to general obligations under 31 U.S.C. § 5318(h). This includes maintaining specific risk-based policies designed to detect and report suspected money laundering activities through correspondent accounts managed in the United States.

Money services businesses (MSBs) have similar requirements concerning foreign agents or counterparts as outlined in FinCEN Interpretive Release 2004-1. Financial institutions should ensure reasonable steps without indiscriminate de-risking based on class.

Additionally, several UN Security Council Resolutions implement economic sanctions relevant to financial institutions which should be familiarized along with OFAC's sanctions programs.

Regarding high-risk jurisdictions like Burma under a call for action, FinCEN advises applying enhanced due diligence when maintaining correspondent accounts for foreign banks from non-cooperative countries identified by intergovernmental organizations endorsed by U.S representatives.

Specific measures apply for DPRK and Iran; U.S. regulations prohibit opening or maintaining correspondent accounts directly or indirectly for North Korean or Iranian financial institutions per existing sanctions including E.O. 13599 and ITSR provisions blocking property interests associated with Iran.

For delisted jurisdictions from FATF monitoring processes, U.S. financial institutions should incorporate these changes into their risk assessments aligned with obligations under relevant CFR sections.

Financial institutions must file Suspicious Activity Reports if they suspect transactions involve illegal funds or indicative activities related to money laundering or terrorist financing.

Questions regarding this release can be directed to FinCEN Regulatory Support Section at frc@fincen.gov.