On Friday the SFC sent around a circular to licensed firms with details of a number of additions to the AML sanctions regime and this included advice from the FATF that some countries were not doing enough to improve their AML CFT systems.
Asian countries named were Indonesia, Myanmar and Pakistan. This is important as the SFC is recommending enhanced due diligence is considered for transactions involving these countries. The SFC states:
LCs and AEs should therefore consider applying increased scrutiny to transactions associated with these jurisdictions, including enhanced due diligence and ongoing monitoring.
This is what the FATF had to say about those three countries:
Indonesia has taken steps towards improving its AML/CFT regime. However, despite Indonesia’s high-level political commitment to work with the FATF and APG to address its strategic AML/CFT deficiencies, Indonesia has not made sufficient progress in implementing its action plan within the agreed timelines, and certain key CFT deficiencies remain regarding the establishment and implementation of an adequate legal framework and procedures for identifying and freezing of terrorist assets. The FATF encourages Indonesia to address these remaining issues, in compliance with international standards.
Myanmar has taken steps towards improving its AML/CFT regime. However, despite Myanmar’s high-level political commitment to work with the FATF and APG to address its strategic AML/CFT deficiencies, Myanmar has not made sufficient progress in implementing its action plan, and certain strategic AML/CFT deficiencies remain. Myanmar should continue to work on implementing its action plan to address these deficiencies, including by: (1) adequately criminalising terrorist financing; (2) establishing and implementing adequate procedures to identify and freeze terrorist assets; (3) further strengthening the extradition framework in relation to terrorist financing; (4) ensuring a fully operational and effectively functioning Financial Intelligence Unit; (5) enhancing financial transparency; and (6) strengthening customer due diligence measures. The FATF encourages Myanmar to address the remaining deficiencies and continue the process of implementing its action plan.
Pakistan has taken substantial steps towards improving its AML/CFT regime, including by issuing a Statutory Regulatory Order that addresses the definition of terrorism and an Anti-Terrorism Amendment Ordinance to establish procedures for the identification and freezing of terrorist assets. The FATF commends Pakistan for the issuance of the Anti-Terrorism Amendment Ordinance, which came into force on 12 October 2013 and allows Pakistan to begin implementing its UNSCR 1373 obligations immediately. The FATF encourages Pakistan to begin implementing the ordinance expeditiously. However, the FATF has concerns regarding the temporary character of this ordinance, which will need to be converted into permanent legislation through the parliamentary process. The FATF therefore urges Pakistani authorities to take the necessary steps for swift ratification of the ordinance by its legislature. If Pakistan amends its Anti-Terrorism Act to incorporate the content of the ordinance before the February 2014 meetings, then the FATF will be able to authorise an on-site visit during its February 2014 meetings to confirm that the process of implementing the required reforms and actions is underway to address deficiencies previously identified by the FATF.