I. Statement by the FATF dated 18 February 2010 regarding Iran and other countries

The statement of the Financial Action Task Force (FATF) dated 18 February 2010 concerns countries for which substantial deficiencies have been identified regarding measures to combat money laundering and the financing of terrorism, and in which the FATF has not yet ascertained the volition to remedy these deficiencies.

The FATF statement describes three categories for which the following measures are to be taken:

1) Category 1 comprises countries with ongoing structural deficiencies, regarding which the FATF urges jurisdictions to apply countermeasures due to the particularly high risk (presently Iran).

Regarding Iran, I already urged institutions to take countermeasures in Circular 13/2008 (GW) dated 7 November 2008. On the basis of the FATF statement dated 25 February 2009, these countermeasures were reinforced in Circular 6/2009 dated 23 March 2009. These measures continue to apply with express reference to the above-mentioned circulars.

2) Regarding the countries in Category 2, which exhibit substantial deficiencies and are currently undertaking no or insufficient efforts to remedy them (currently Angola, North Korea, Ecuador and Ethiopia), the FATF urges consideration of significantly increased risk.

A higher level of customer due diligence applies to business relationships with these countries or business relationships with persons including companies and institutions registered or resident in these countries as well as for transactions from or to these countries.
The results of any security and review measures taken in this respect are to be clearly documented for the internal audit, the audit of annual financial statements and any special audits.

3) Category 3 comprises other countries that have already been under observation for a longer time because of strategic deficiencies; the FATF has welcomed efforts undertaken by these countries but warns of continued increased risk (currently Pakistan, Turkmenistan, Sao Tomé & Príncipe).

Regarding these countries, I already informed you in Circular 4/2008 dated 18 March 2008 of the FATF statement dated 28 February 2008, in which it expressed its concern about deficiencies in the combat against money laundering and terrorist financing.

I would like to make it clear that it is the responsibility of each institution or company to decide whether and to what extent business relationships and transactions relating to these countries demand a higher level of customer due diligence based on risks. The decision should take into account the FATF statement.

II. FATF information report dated 18 February 2010 regarding countries under observation

In the ongoing process of the FATF’s and FATF-style regional bodies’ (FSRBs) review of countries, individual countries have shown an increased number of deficiencies in terms of the FATF’s core and key recommendations. For details, please refer to the FATF information report dated 18 February 2010.

There is no acute need for mandatory action. This is particularly the case for Azerbaijan, which was mentioned among other countries in the information report and which was the object of my Circular 6/2009 (GW) dated 23 March 2009.
The FATF will perform a closer review of the countries referred to in the information report until its plenary meeting in June 2010, and decide on a further plan of action, if necessary.

III. Cancellation of countermeasures regarding Uzbekistan

Regarding Uzbekistan, I urged institutions to take countermeasures in my Circular 13/2008 (GW) dated 7 November 2008 and Circular 6/2009 (GW) dated 23 March 2009. As a result of the fact that the FATF has since identified significant improvements, particularly in legislation, I cancel all countermeasures regarding Uzbekistan.