New Zealand Law Society - Three countries added to FATF high risk and monitored list

Three countries added to FATF high risk and monitored list

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The Financial Action Task Force (FATF) has updated its list of high-risk and other monitored jurisdictions, with Iceland, Mongolia and Zimbabwe having been added.

The three countries are identified as having strategic Anti-Money Laundering/Countering Funding of Terrorism (AML/CFT) deficiencies and have developed action plans with FATF to resolve them.

Ethiopia, Sri Lanka and Tunisia have been removed from the list and are no longer subject to FATF's ongoing monitoring process.

New Zealand is part of FATF, which is an international body established in 1989 with the objective of setting standards and promoting effective implementation of legal, regulatory and operational measures for combating ML/TF and other related threats.

New Zealand's Department of Internal Affairs, which is responsible for overseeing AML/CFT compliance by a number of sectors, including legal services, says it 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," it says.

"Please also 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. For example, this includes whether it has high levels of organised crime, bribery or corruption, or borders a conflict zone, or is associated with the production or transnational shipment of illicit drugs."

New Zealand's AML/CFT supervisors, including the department, provided guidelines in 2012 for assessment of the regulatory environment of other countries.