Circular to Licensed Corporations and Associated Entities - Anti-Money Laundering / Counter-Financing of Terrorism
(1) FATF Statement on High-Risk Jurisdictions subject to a Call for Action
(2) FATF Statement on Jurisdictions under Increased Monitoring
(3) Outcomes from the FATF Virtual Plenary, 24 June 2020

10 Jul 2020



Circular to Licensed Corporations and Associated Entities

Anti-Money Laundering / Counter-Financing of Terrorism

(1)  FATF Statement on High-Risk Jurisdictions subject to a Call for Action

(2)  FATF Statement on Jurisdictions under Increased Monitoring

(3)  Outcomes from the FATF Virtual Plenary, 24 June 2020

(1)  FATF Statement on High-Risk Jurisdictions subject to a Call for Action

Further to our circular issued on 10 March 2020, this is to inform you that the Financial Action Task Force (“FATF”) in a statement issued on 30 June 2020 Note 1 advised its members to refer to the list of high-risk jurisdictions subject to a call for action adopted in February 2020, namely Iran and the Democratic People’s Republic of Korea, and that the FATF’s call for action on these high-risk jurisdictions remains in effect Note 2. The FATF’s statement identifying high-risk jurisdictions subject to a call for action in February 2020 can be found on the website of the FATF (http://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/call-for-action-february-2020.html).

While the aforesaid February 2020 statement may not necessarily reflect the most recent status in Iran and the Democratic People’s Republic of Korea’s AML/CFT regime, the FATF decided on a general pause in the review process for this list in April 2020 in response to the COVID-19 crisis.  

(2)  FATF Statement on Jurisdictions under Increased Monitoring

In addition, the FATF issued an updated statement on the progress made by two of the jurisdictions under increased monitoring Note 3, namely Mongolia and Iceland in addressing the identified strategic deficiencies in their regimes to counter money laundering, terrorist financing and proliferation financing. The updated statement can be found on the website of the FATF (http://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/increased-monitoring-june-2020.html). The statement on Jurisdictions under Increased Monitoring issued by the FATF in February 2020 remains in effect for the remaining jurisdictions identified at that time Note 4 and can be found on the website of the FATF (http://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/increased-monitoring-february-2020.html).

In response to the COVID-19 crisis, the FATF decided on a general pause in the review process for the list of jurisdictions under increased monitoring in April 2020, and granted the jurisdictions under increased monitoring an additional four months for deadlines, with the exception of Mongolia and Iceland who requested to continue on their original schedule. The FATF reviewed and virtually met with these two jurisdictions and the result of these discussions is set out in the aforesaid updated statement.

The FATF will closely monitor the implementation of action plans by the jurisdictions under increased monitoring and encourages its members to consider in their risk analysis the information presented in the FATF statements.

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, licensed corporations (“LCs”) and associated entities (“AEs”) are reminded to browse the website of the FATF for the latest information.

(3)  Outcomes from the FATF Virtual Plenary, 24 June 2020

In addition to the statements in (1) and (2) above, the FATF also published various other outcomes of its recent Virtual Plenary which may be of interest to LCs and AEs. They include, for example, the publication of 12-Month Review of the Revised FATF Standards on Virtual Assets/VASPs report Note 5 and FATF Report to the G20 on so-called 'Stablecoins' Note 6 on the FATF website in July 2020.

Further information can be found on the website of the FATF (http://www.fatf-gafi.org/publications/fatfgeneral/documents/outcomes-fatf-plenary-june-2020.html).

Should you have any queries regarding the contents of this circular, please contact Ms Kiki Wong at 2231 1569 who will assist to refer your queries to the relevant officer.

Intermediaries Supervision Department
Intermediaries Division
Securities and Futures Commission

End

SFO/IS/026/2020

Note 1 The statement can be found on the website of the FATF (http://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/call-for-action-june-2020.html).
Note 2 Please refer to our circular issued on 10 March 2020 (https://www.sfc.hk/edistributionWeb/gateway/EN/circular/aml/doc?refNo=20EC20).
Note 3 There has been no change to the list of jurisdictions under increased monitoring since the last statement issued by the FATF in February 2020.
Note
4 Namely Albania, The Bahamas, Barbados, Botswana, Cambodia, Ghana, Jamaica, Mauritius, Myanmar, Nicaragua, Pakistan, Panama, Syria, Uganda, Yemen, Zimbabwe
Note
5 The report can be found on the website of the FATF (http://www.fatf-gafi.org/publications/fatfrecommendations/documents/12-month-review-virtual-assets-vasps.html)
Note
6 The report can be found on the website of the FATF (http://www.fatf-gafi.org/publications/fatfgeneral/documents/report-g20-so-called-stablecoins-june-2020.html)


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Page last updated : 10 Jul 2020