Israel’s Money Laundering and Terror Financing Prohibition Authority Updates List of At-Risk Countries of the FATF
The international Financial Action Task Force (FATF) recently issued two announcements updating the list of countries and jurisdictions at high risk of money laundering, terrorist financing, and proliferation financing, and reiterated its call to apply countermeasures to these high-risk jurisdictions. Established in 1989, the FATF serves as the global AML/CFT watchdog that sets uniform international standards aimed at preventing these illegal activities.
The Latest Announcements
The Blacklist
The FATF’s announcement regarding the blacklist refers to Iran, North Korea, and Myanmar, and issues a call for action. The FATF is calling on all jurisdictions to apply financial countermeasures against Iran, which failed to enact the Palermo and Terrorist Financing Conventions, and against North Korea, which failed to address the significant deficiencies in its AML/CFT regime and the serious risks relating to the proliferation of weapons of mass destruction. In relation to Myanmar, the FATF is calling on all jurisdictions to apply enhanced due diligence measures, proportionate to the risks.
Increased Monitoring – the Grey List
In its second announcement, the FATF updated the list of countries subject to increased monitoring (the grey list) due to strategic deficiencies in their AML/CFT and anti-proliferation regimes. Unlike the countries on the blacklist, the countries on the grey list are cooperating with the FATF and are being monitored on an ongoing basis. The FATF also updated the list of countries included on the grey list. They include Bulgaria, Burkina Faso, Cameroon, Croatia, Congo, Haiti, Kenya, Mali, Monaco, Mozambique, Namibia, Nigeria, Philippines, Senegal, South Africa, South Sudan, Syria, Tanzania, Vietnam, Yemen, and Venezuela.
Business Activities under Supervision
Following the FATF’s announcements, the Israel Money Laundering and Terror Financing Prohibition Authority (IMPA) issued an announcement containing the above lists of countries and jurisdictions. This announcement relates to anti-money laundering orders applicable to banking corporations, the Postal Bank, TASE members, portfolio managers, institutional entities, financial and credit asset service providers, precious stone traders, business service providers, credit brokerage system operators, and trading arenas. It calls on them to apply increased control measures for activities in the relevant countries and jurisdictions, in compliance with the obligations prescribed in the orders.
In addition to these obligations, the above entities are under reporting obligations to IMPA for any transaction that must be reported pursuant to the orders, at the sum of ILS 5,000 or more, which relates to any activity carried out with the following countries: Lebanon, Egypt, Syria, Saudi Arabia, Jordan, Iraq, Yemen, Iran, Algeria, Afghanistan, the Palestinian Authority, the Gaza Strip, Libya, the Council of the United Arab Emirates (GCC States), Malaysia, Morocco, Sudan, Somalia, Pakistan, Tunisia, Turkey, and North Korea. This is provided, however, the Trade with the Enemy Ordinance of 1939 does not altogether prohibit such transaction.
Considering these developments, all those affected by the FATF’s recent announcements and the orders specified in IMPA’s announcement should conduct examinations and ensure they are complying with the provisions applicable to them and the relevant regulatory requirements.
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Barnea Jaffa Lande’s Capital Markets Department has extensive experience advising companies, entities, and individuals on issues of compliance, financial regulation, and international law.
Adv. Andrey Yanai, a partner in the department, is at your service to answer any questions about the applicability of IMPA’s notice and its implications.