The Financial Crimes Enforcement Network (FinCEN) has notified U.S. financial institutions about updates from the Financial Action Task Force (FATF) regarding jurisdictions with strategic deficiencies in anti-money laundering, combating the financing of terrorism, and counter-proliferation finance. The FATF is an intergovernmental body that sets international standards in these areas.
On February 21, 2025, the FATF added Laos and Nepal to its list of Jurisdictions Under Increased Monitoring while removing the Philippines from this list. The High-Risk Jurisdictions Subject to a Call for Action list remains unchanged, including Iran, North Korea (DPRK), and Burma. "Specifically, the FATF continues to call on jurisdictions to apply countermeasures on Iran and DPRK," with Burma requiring enhanced due diligence but not countermeasures.
The FATF's listing process includes two categories: Jurisdictions Under Increased Monitoring and High-Risk Jurisdictions Subject to a Call for Action. The former identifies jurisdictions working with the FATF to address deficiencies, while the latter highlights those with significant strategic deficiencies that require enhanced due diligence or countermeasures.
Financial institutions are reminded of their obligations under U.S. regulations to maintain due diligence programs for foreign financial institutions (FFIs). These programs should be risk-based and designed to detect and report money laundering activities. Money services businesses have similar requirements concerning foreign agents or counterparties.
Regarding UN sanctions, financial institutions must comply with relevant Security Council Resolutions. Additionally, they should be aware of U.S. Government sanctions programs managed by the Office of Foreign Assets Control (OFAC).
For High-Risk Jurisdictions Subject to a Call for Action like Burma, FinCEN advises applying enhanced due diligence proportionate to risks when dealing with banks from noncooperative countries in AML principles.
Concerning DPRK and Iran, U.S. financial institutions must adhere to strict prohibitions against maintaining correspondent accounts for North Korean or Iranian financial entities. This follows extensive U.S. restrictions aimed at pressuring Iran over its nuclear program and support for terrorism.
Iranian transactions remain heavily restricted under Executive Order 13599 and related regulations. On October 25, 2019, FinCEN designated Iran as a Jurisdiction of Primary Money Laundering Concern under Section 311 of the USA PATRIOT Act.
For jurisdictions removed from FATF monitoring lists, financial institutions should consider these changes when assessing risk according to their regulatory obligations.
If any suspicious activity is detected indicating money laundering or terrorist financing, financial institutions must file a Suspicious Activity Report as required by law.
Questions about this release can be directed to FinCEN's Regulatory Support Section via their website.
