The Financial Action Task Force (FATF) is concerned by the unaddressed AML/CFT deficiencies in several countries such as North Korea, Iran and those linked with the terrorist group called the Islamic State (IS). To protect Canada’s financial system from suspicious transactions with such deficient jurisdictions and to comply with Canada’s AML/CFT law, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) has issued its guidelines.
According to the FATF, financial institutions in all jurisdictions must monitor their business transactions with North Korea. They must employ appropriate counter-measures and financial sanctions to protect themselves from the risks of money-laundering and financing of terrorism. FINTRAC’s 2017 Operational Alert on North Korea’s international money-laundering and terrorism financing operations serves a similar advisory purpose.
Another country of concern is Iran. Despite some AML/CFT progress, the FATF found in February 2020 that Iran has still not addressed some strategic deficiencies. Thus, Iran is still among FATF’s high-risk jurisdictions subject to a call for action. Due to this, FINTRAC is communicating the risks of doing business with entities in Iran to all relevant reporting entities. It also recommends enhanced customer due diligence for financial transactions involving Iran.
Additionally, FINTRAC is concerned about terrorism financing linked with the Islamic State. The watchdog is reminding all reporting entities that they are required to submit a timely terrorist property report to FINTRAC. FINTRAC’s advice is that reporting entities should carefully determine whether they must file a suspicious transaction report for transactions with a jurisdiction under IS control.