On the 3rd July 2014, the Malta Financial Services Authority (MFSA) issued a Notice to the financial services industry in order to draw the attention of licence holders to the recent publication by the Financial Action Task Force (FATF) of two documents identifying countries considered to have ‘strategic deficiencies’ relating to anti-money laundering and combating the financing of terrorism (AML/CFT).
As the global standard-setting body for AML/CFT, tasked primarily with protecting the international financial system from money laundering and financing of terrorism risks, the FATF publicly identifies jurisdictions that have strategic deficiencies and works with them with a view to addressing those deficiencies that pose a risk to the international financial system.
High-risk and Non-cooperative Jurisdictions
The FATF Public Statement, which was issued on the 27th June 2014, identifies jurisdictions with serious strategic AML/CFT deficiencies, which are accordingly classified as:
- Jurisdictions that have strategic AML/CFT deficiencies and to which counter-measures apply; and
- 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.
Jurisdictions which have strategic AML/CFT deficiencies for which they have developed an action plan with the FATF
In an additional statement of the same date, titled “Improving Global AML/CFT Compliance: on-going process”, the FATF identified jurisdictions with strategic AML/CFT deficiencies that have provided a high-level political commitment to address the deficiencies through the implementation of an action plan developed with the FATF. Clearly, the situation differs in each jurisdiction and therefore each presents differing degrees of ML/FT risks.
Whilst reiterating its continued commitment to work, together with the ‘FATF-style regional bodies’ (FSRBs), with the identified jurisdictions and report accordingly on the progress made in addressing the identified deficiencies, the FATF called upon the relative jurisdictions to complete the implementation process of the respective action plans expeditiously and within the proposed timeframes.
The MFSA, in turn, has called upon all Licence Holders to give due consideration to the FATF statements and to implement the measures set out under the Financial Intelligence Analysis Unit (FIAU) Implementing Procedures (specifically Chapter 8, Section 1, which unequivocally provides, inter alia, that jurisdictions listed in the FATF public documents shall not be considered to be ‘reputable jurisdictions’) when undertaking any business with any of the jurisdictions listed in the FATF statements.
The abovementioned FATF documents are available at:
- FATF Public Statement – 27 June 2014
- IMPROVING GLOBAL AML/CFT COMPLIANCE: ON-GOING PROCESS – 27 June 2014