High risk movers and shakers

The regular updating by the Financial Action Task Force of their list of dodgy places (or, more tactfully, high-risk and non-cooperative jurisdictions) is now part of every MLRO’s diary.  Although I am the first to admit that inclusion on – or absence from – these lists may well have a political dimension to it, it is now widely accepted that reference to the FATF’s concerns is an essential component of the assembling of an in-house list of high risk jurisdictions.  And checking the latest list is the work of a moment, now that that FATF is so organised about publishing it the moment it is agreed at the plenary meeting.

The most recent plenary (in Brisbane, if you please – I quite fancy it myself) finished on 26 June, and the updated list was on the FATF website seemingly within minutes.  As you know, the FATF list has three tiers: jurisdictions subject to an FATF call on its members to apply counter-measures [the baddies, currently Iran and North Korea]; jurisdictions with strategic AML/CFT deficiencies that have not made sufficient progress; and other monitored jurisdictions that have agreed an action plan with the FATF.  To my mind, the thing that matters is to track the movers and shakers.  You need a clear desk and an even clearer head to work out what has changed, so – generous soul that I am – I have done it for you this time.  (Don’t get used to it; I’m just in a good mood because of the sunshine.)  For most MLROs, appearance in any of the three tiers is enough to warrant high risk status for a jurisdiction (and indeed, when jurisdictions themselves issue instructions or other warnings that Must Be Obeyed, the FATF’s list is almost always the starting point), so we’re looking for countries that, this time round, have appeared for the first time in those three tiers or disappeared from them.

After working hard to put in place updated AML requirements, Indonesia has worked its way out of the three tiers – so if you’re considering them high risk purely on the basis of their FATF ranking, you can stop that right now.  (The local press was rightly jubilant about the change; we might occasionally scoff about the independence of the FATF’s list, but there’s no denying that being on it can be very uncomfortable.)  Appearing in the bottom of the three tiers – and thereby almost certainly hauling themselves into your high risk category – are Bosnia & Herzegovina, and Uganda.  Ecuador is also on the move, but as it’s only going from tier two (strategic deficiencies) to tier three (monitored), it’s not done enough to remove itself from your high risk category just yet.  So there you are – you’re welcome.  The next changes will be issued at the end of the next FATF plenary meeting, so that’s 23 October 2015.

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