On 21 February 2020, the Financial Action Task Force (FATF), of which Singapore is a member, issued an updated Statement on High-Risk Jurisdictions subject to a Call for Action^[1]. Aside from identifying them as high risk jurisdictions, the statement also highlights the strategic deficiencies in the anti-money laundering/combating the financing of terrorism (AML/CFT) regimes of the Democratic People’s Republic of Korea (DPRK) and Iran.

• On DPRK, the FATF remains concerned by its failure to address the significant deficiencies in its AML/CFT regime and the serious threats they pose to the integrity of the international financial system. The FATF urges the DPRK to immediately and meaningfully address its AML/CFT deficiencies. The FATF has serious concerns with the money laundering, terrorism financing and proliferation financing risks posed by DPRK’s illicit activities. DPRK is subject to the FATF’s call on countries to apply counter-measures and FIs should give special attention to business relationships and transactions with links, whether directly or indirectly, to the DPRK. Countries and financial institutions (FIs) are called to apply effective counter‑measures, targeted financial sanctions, and other measures in accordance with the applicable United Nations Security Council Resolutions (UNSCRs). In considering the range of counter-measures, FIs in Singapore should consider DPRK a high risk jurisdiction and apply enhanced due diligence measures accordingly. FIs should continue to comply with the requirements in the MAS (Sanctions and Freezing of Assets of Persons – DPRK) Regulations 2016, and take appropriate risk mitigation, incorporating the relevant guidance provided by MAS.

• Iran’s action plan expired in January 2018 and in February 2020, FATF noted Iran has not completed the action plan. Given Iran’s continued failure to enact the Palermo and Terrorist Financing Conventions in line with the FATF Standards, the FATF has decided in February 2020 to fully lift the suspension of counter-measures. FATF members and FIs are called to apply effective counter-measures, in line with Recommendation 19. The FATF remains concerned with the terrorism financing risk emanating from Iran and the threat this poses to the international financial system. If Iran ratifies the Palermo and Terrorist Financing Conventions in line with the FATF Standards, the FATF will decide on the next steps, including whether to suspend counter-measures. In considering the range of counter-measures, FIs in Singapore should consider Iran a high risk jurisdiction and apply enhanced due diligence measures accordingly. FIs should continue to comply with the requirements in the MAS (Sanctions and Freezing of Assets of Persons – Iran) Regulations 2016, and take appropriate risk mitigation, incorporating the relevant guidance provided by MAS.

Details of the Statement can be found at:

http://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/call-for-action-february-2020.html

The FATF has also issued an updated statement on Jurisdictions under Increased Monitoring^[2]. These jurisdictions are actively working with the FATF to address strategic deficiencies in their regime to counter money laundering, terrorist financing and proliferation financing. This statement can assist FIs and relevant non-financial institutions in your risk assessment and mitigation.  The FATF statement on Jurisdictions under Increased Monitoring can be found at:

http://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/increased-monitoring-february-2020.html

Non-financial institutions that are subjected to AML/CFT requirements in Singapore are similarly advised to note the updated and new statements and take appropriate measures in accordance with your respective AML/CFT obligations, and the relevant UN Regulations.