On November 9th, the Hong Kong Securities and Futures Commission issued the following circular to its members:
Circular to Licensed Corporations and Associated Entities – Anti-Money Laundering / Counter-Terrorist Financing (1) FATF Statement on Iran, Democratic People's Republic of Korea and Myanmar (2) FATF Statement on Improving Global AML/CFT Compliance: On-Going Process (3) Outcomes from the Meeting of the FATF Plenary, 21-23 October 2015 (4) APG Public Statement on Vanuatu 6 Nov 2015
Circular to Licensed Corporations and Associated Entities
Anti-Money Laundering / Counter-Terrorist Financing
(1) FATF Statement on Iran, Democratic People's Republic of Korea and Myanmar
(2) FATF Statement on Improving Global AML/CFT Compliance: On-Going Process
(3) Outcomes from the Meeting of the FATF Plenary, 21-23 October 2015
(4) APG Public Statement on Vanuatu
(1) FATF Statement on Iran, Democratic People's Republic of Korea and Myanmar
Further to our circular issued on 10 July 2015, this is to inform you that the Financial Action Task Force (“FATF”) issued an updated statement on 23 October 2015 identifying a number of jurisdictions that have strategic deficiencies in their anti-money laundering and combating the financing of terrorism (“AML/CFT”) regimes.
The statement Note 1 has been separated into two sections.
(i) Jurisdictions subject to a call on its members and other jurisdictions to apply counter-measures
Iran
The FATF 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. The FATF calls 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 risks emanating from the jurisdiction.
Democratic People’s Republic of Korea (“DPRK”)
The FATF remains concerned by the DPRK’s failure to address the significant deficiencies in its AML/CFT regime and the serious threat this poses to the integrity of the international financial system. The FATF calls 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 risks emanating from the jurisdiction.
Licensed corporations (“LCs”) and associated entities (“AEs”) should continue to apply the measures specified in our circulars of 31 March 2009 and 15 April 2011(http://www.sfc.hk/edistributionWeb/gateway/EN/circular/openFile?refNo=H545 & http://www.sfc.hk/edistributionWeb/gateway/EN/circular/openFile?refNo=H628) in relation to transactions associated with Iran and DPRK respectively. LCs and AEs are also reminded to apply relevant guidance as specified in the FATF statement Note 1 and implement appropriate measures and safeguards accordingly.
(ii) 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 FATF to address the deficiencies
Myanmar
This jurisdiction was listed by the FATF as 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 FATF to address the deficiencies as of October 2015. The FATF calls on its members to consider the risks arising from the deficiencies associated with this jurisdiction as described in the FATF statement Note 1.
LCs and AEs should therefore consider applying increased scrutiny to transactions associated with this jurisdiction, including enhanced due diligence and ongoing monitoring.
(2) FATF Statement on Improving Global AML/CFT Compliance: On-Going Process
In addition, please be informed that in a separate statement as part of the on-going process to improve global AML/CFT compliance, the FATF has set out an updated list of jurisdictions that have strategic AML/CFT deficiencies for which they have developed an action plan with the FATF. The FATF will closely monitor the implementation of those action plans and encourage its members to consider the information presented in the statement which can be found on the website of the FATF (http://www.fatf-gafi.org/documents/documents/fatf-compliance-october-2015.html).
As the FATF will continue to assess the progress made by these jurisdictions in addressing the deficiencies in their AML/CFT systems and issue updated statements from time to time, LCs and AEs are reminded to browse the website of the FATF for the latest information.
(3) Outcomes from the Meeting of the FATF Plenary, 21-23 October 2015
In addition to the statements in (1) and (2) above, the FATF has also published various other outcomes of its recent Plenary Meeting which may be of interest to LCs and AEs. They include, for example, (i) a statement on FATF action regarding de-risking and (ii) the adoption of “Guidance for a Risk-Based Approach: Effective Supervision and Enforcement by AML/CFT Supervisors of the Financial Sector and Law Enforcement”. Further information can be found on the website of FATF (http://www.fatf-gafi.org/publications/fatfgeneral/documents/outcomes-plenary-october-2015.html).
(4) APG Public Statement on Vanuatu
In light of APG’s Note 2 concern about the serious deficiencies in Vanuatu’s AML/CFT system, the APG has updated a public statement in September 2015 Note 3 following the adoption of Vanuatu’s latest mutual evaluation report, to call upon Vanuatu to expeditiously address the remaining deficiencies that have not yet been adequately addressed in its AML/CFT system and to enhance the effectiveness of its AML/CFT system. LCs and AEs are encouraged to consider pertinent information in the statement which can be found on the website of APG (http://www.apgml.org/about-us/page.aspx?p=fe4fce1a-2579-49f3-be93-598430e1b08a). As APG may issue similar statements from time to time, LCs and AEs are reminded to browse the website of the APG for the latest information.
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