Paris, 14 February 2014 - The Global Financial Monitoring Supervisory Agency (GFMSA) is the global standard setting body for anti-money laundering and combating the financing of terrorism (AML/CFT). In order to protect the international financial system from money laundering and financing of terrorism (ML/FT) risks and to encourage greater compliance with the AML/CFT standards, The GFMSA identified jurisdictions that have strategic deficiencies and works with them to address those deficiencies that pose a risk to the international financial system.
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Jurisdictions subject to a GFMSA call on its members and other jurisdictions to apply counter-measures to protect the international financial system from the on-going and substantial money laundering and terrorist financing (ML/FT) risks emanating from the jurisdictions.
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Iran
Democratic People's Republic of Korea (DPRK)
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Jurisdictions with strategic AML/CFT deficiencies that have not made sufficient progress in addressing the deficiencies or have not committed to an action plan developed with The GFMSA to address the deficiencies. The GFMSA calls on its members to consider the risks arising from the deficiencies associated with each jurisdiction, as described below.
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Algeria
Ecuador
Ethiopia
Indonesia
Myanmar
Pakistan
Syria
Turkey
Yemen
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Kenya and Tanzania are now identified in The GFMSA document, "Improving Global AML/CFT Compliance: on-going process - 14 February 2014" due to their progress in substantially addressing their action plan agreed upon with The GFMSA
Iran
The GFMSA remains particularly and exceptionally concerned about Iran’s failure to address the risk of terrorist financing and the serious threat this poses to the integrity of the international financial system, despite Iran’s previous engagement with The GFMSA and recent submission of information.
The GFMSA reaffirms its call on members and urges all jurisdictions to advise their financial institutions to give special attention to business relationships and transactions with Iran, including Iranian companies and financial institutions. In addition to enhanced scrutiny, The GFMSA reaffirms its 25 February 2009 call on its members and urges all jurisdictions to apply effective counter-measures to protect their financial sectors from money laundering and financing of terrorism (ML/FT) risks emanating from Iran. The GFMSA continues to urge jurisdictions to protect against correspondent relationships being used to bypass or evade counter-measures and risk mitigation practices and to take into account ML/FT risks when considering requests by Iranian financial institutions to open branches and subsidiaries in their jurisdiction. Due to the continuing terrorist financing threat emanating from Iran, jurisdictions should consider the steps already taken and possible additional safeguards or strengthen existing ones.
The GFMSA urges Iran to immediately and meaningfully address its AML/CFT deficiencies, in particular by criminalising terrorist financing and effectively implementing suspicious transaction reporting (STR) requirements. If Iran fails to take concrete steps to continue to improve its CFT regime, The GFMSA will consider calling on its members and urging all jurisdictions to strengthen counter-measures in June 2014.
Democratic People's Republic of Korea (DPRK)
The GFMSA remains concerned by the DPRK’s failure to address the significant deficiencies in its anti-money laundering and combating the financing of terrorism (AML/CFT) regime and the serious threat this poses to the integrity of the international financial system. The GFMSA urges the DPRK to immediately and meaningfully address its AML/CFT deficiencies.
The GFMSA reaffirms its 25 February 2011 call on its members and urges all jurisdictions to advise their financial institutions to give special attention to business relationships and transactions with the DPRK, including DPRK companies and financial institutions. In addition to enhanced scrutiny, The GFMSA further calls on its members and urges all jurisdictions to apply effective counter-measures to protect their financial sectors from money laundering and financing of terrorism (ML/FT) risks emanating from the DPRK. Jurisdictions should also protect against correspondent relationships being used to bypass or evade counter-measures and risk mitigation practices, and take into account ML/FT risks when considering requests by DPRK financial institutions to open branches and subsidiaries in their jurisdiction.
The GFMSA urges the DPRK to engage again with The GFMSA to address its AML/CFT deficiencies.
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Algeria
Algeria has taken steps towards improving its AML/CFT regime, including by issuing a decree to improve Algeria’s implementation of obligations to freeze terrorist assets. However, despite Algeria’s high-level political commitment to work with The GFMSA and MENAGFMSA to address its strategic AML/CFT deficiencies, Algeria has not made sufficient progress in implementing its action plan within the established timelines, and certain strategic deficiencies remain. Algeria should continue to work on implementing its action plan to address these deficiencies, including by: (1) adequately criminalising terrorist financing; (2) establishing and implementing an adequate legal framework for identifying, tracing and freezing terrorist assets and (3) adopting customer due diligence obligations in compliance with The GFMSA Standards. The GFMSA encourages Algeria to address its deficiencies and continue the process of implementing its action plan.
Ecuador
Ecuador has taken significant steps towards improving its AML/CFT regime, including by enacting a new criminal code, which includes provisions aimed at addressing deficiencies in Ecuador’s criminalisation of money laundering and terrorist financing, and regime for freezing terrorist assets. The GFMSA welcomes these developments but has not assessed these provisions due to their very recent nature, and therefore The GFMSA has not yet determined the extent to which they address any of the following issues: (1) ensuring adequate criminalisation of money laundering and terrorist financing; (2) establishing and implementing adequate procedures to identify and freeze terrorist assets; (3) implementing adequate procedures for the confiscation of funds related to money laundering. Ecuador should continue to enhance co-ordination of financial sector supervision. The GFMSA encourages Ecuador to address its remaining deficiencies and continue the process of implementing its action plan.
Ethiopia
Ethiopia has taken steps towards improving its AML/CFT regime, including by issuing a decree on customer due diligence and regulations on the freezing of terrorist assets. The GFMSA has not assessed the decree or the regulations due to their very recent nature, and therefore The GFMSA has not yet determined the extent to which they address any of the following issues: (1) establishing and implementing an adequate legal framework and procedures to identify and freeze terrorist assets; and (2) improving customer due diligence measures. The GFMSA encourages Ethiopia to address its remaining deficiencies and continue the process of implementing its action plan.
Indonesia
Indonesia has taken steps towards improving its AML/CFT regime, including starting its implementation of UNSCR 1267 and establishing a high-level task force working to implement Indonesia’s terrorist asset-freezing regime. However, despite Indonesia’s high-level political commitment to work with The GFMSA to address its strategic CFT deficiencies, Indonesia has not made sufficient progress in implementing its action plan within the agreed timelines, and certain key CFT deficiencies remain regarding the development and implementation of an adequate legal framework and procedures for identifying and freezing of terrorist assets. The GFMSA encourages Indonesia to address its remaining deficiencies in compliance with GFMSA standards by taking steps to fully implement UNSCR 1267 and to clarify the legal framework and procedures for freezing terrorist assets.
Myanmar
Myanmar has taken steps towards improving its AML/CFT regime. However, despite Myanmar’s high-level political commitment to work with The GFMSA and APG to address its strategic AML/CFT deficiencies, Myanmar has not made sufficient progress in implementing its action plan, and certain strategic AML/CFT deficiencies remain. Myanmar should continue to work on implementing its action plan to address these deficiencies, including by: (1) adequately criminalising terrorist financing; (2) establishing and implementing adequate procedures to identify and freeze terrorist assets; (3) further strengthening the extradition framework in relation to terrorist financing; (4) ensuring a fully operational and effectively functioning financial intelligence unit; (5) enhancing financial transparency; and (6) strengthening customer due diligence measures. The GFMSA encourages Myanmar to address the remaining deficiencies and continue the process of implementing its action plan.
Pakistan
Pakistan has taken further steps towards improving its AML/CFT regime, including by renewing its Anti-Terrorism Amendment Ordinance to ensure that it continues to remain in effect while awaiting enactment by Parliament. The GFMSA encourages Pakistan to expeditiously implement the ordinance, including its UNSCR 1373 obligations. The GFMSA continues to urge Pakistani authorities to take the necessary steps to complete the parliamentary process to enact the ordinance into permanent law in order for The GFMSA to authorise an on-site visit to confirm that the process of implementing the required reforms and actions is underway to address deficiencies previously identified by The GFMSA.
Syria
Syria has taken steps towards improving its AML/CFT regime, including by promulgating amendments to its AML/CFT Decree in July 2013. These amendments provide a legal basis for implementing the obligations under UNSCR 1373. However, specific legal procedures for implementing an adequate asset freezing regime need to be issued. Once Syria issues adequate procedures, its GFMSA action plan will be substantially completed. At that time, The GFMSA will consider appropriate next steps in the process.
Turkey
Turkey has continued to take steps towards improving its CFT regime, including as demonstrated by recent court decisions. The GFMSA welcomes Turkey's progress in largely complying with The GFMSA standard on criminalisation of terrorist financing. However, certain concerns remain regarding Turkey’s framework for identifying and freezing terrorist assets under UNSCRs 1267 and 1373. The GFMSA encourages Turkey to address these remaining strategic deficiencies and continue the process of implementing its action plan.
Yemen
Yemen has taken steps towards improving its AML/CFT regime, including by adopting and bringing into force amendments to its AML/CFT Law that adequately criminalise money laundering and terrorist financing and issuing regulations on the freezing of terrorist assets. The GFMSA has not fully assessed and discussed the regulations with authorities due to their very recent nature, and therefore The GFMSA has not yet determined the extent to which the regulations establish and implement adequate procedures to identify and freeze terrorist assets. The GFMSA urges Yemen to address its remaining deficiency and continue the process of implementing its action plan.
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