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FATF Call for Action (aka "blacklist") and EDD

26/10/2022

Myanmar IS now a FATF High-Risk Jurisdiction subject to a Call for Action (aka "blacklist"), has potentially very significant consequences for Southeast Asia.

What does it mean to be on the blacklist?

Per FATF Recommendation 19, financial institutions MUST

  • "Apply enhanced due diligence measures to business relationships and transactions with natural and legal persons, and financial institutions, from countries for which the FATF calls for this".

The above means that

  • No relationship with Burmese persons (natural or legal) can be subject to simplified due diligence - the much higher standard of EDD has to apply to all such relationships and activities.

The Interpretative Note to the recommendation gives a lot more detail, including

  • Providing for not allowing FIs to establish branches in a relevant country, to terminating correspondent relationships, and even preventing FIs from relying on CDD conducted in the relevant country.

SEE

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