Reminder for reporting entities relating to higher risk jurisdictions

10 July 2019

The Financial Action Task Force (FATF) updated its list of ‘high risk and other monitored jurisdictions’ on 21 June 2019. New Zealand is part of FATF, an international body established in 1989 with the objective of setting standards and promoting effective implementation of legal, regulatory and operational measures for combating money laundering, terrorism financing and other related threats to the integrity of the international financial system.

The updated FATF list includes North Korea and Iran. These two countries are subject to a FATF call on its members to apply counter-measures or enhanced customer due diligence. The list also includes the Bahamas, Botswana, Cambodia, Ethiopia, Ghana, Pakistan, Panama, Sri Lanka, Syria, Trinidad and Tobago, Tunisia and Yemen. These countries are identified as having strategic AML/CFT deficiencies and have developed an action plan with FATF to resolve them. The FATF list will next be updated in October 2019.

This is a timely reminder that reporting entities are required to conduct an enhanced level of customer due diligence on all non-resident customers from countries that have insufficient AML/CFT systems or measures in place. There are additional requirements to monitor and examine business relationship and transactions involving these countries, and where necessary, have additional measures or restrictions on dealing with them. Also, reporting entities that maintain business relationships with higher risk jurisdictions need to address these risks in their AML/CFT programme.

It is also important to remember that the level of ML/TF risk associated with a country is much wider than whether it has insufficient AML/CFT measures in place. Further information relating to the requirements of the AML/CFT Act in relation to country risk is in the AML/CFT supervisors’ Countries Assessment Guideline (PDF, 140KB).


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