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3/19/2020

Financial Action Task Force (FATF) Calls for Countermeasures on Iran, Evaluates U.S. AML Framework, Releases Digital Identity Guida…

Financial Action Task Force (FATF) Calls for Countermeasures on
Iran, Evaluates U.S. AML Framework, Releases Digital Identity
Guidance
February 21, 2020

Paris – Today the Financial Action Task Force (FATF) concluded its 31st plenary meeting with
a public statement calling for countermeasures on Iran. The FATF also released guidance on
digital identity for customer identification and verification, and evaluated Treasury’s Customer
Due Diligence rule for compliance with the FATF standards.
“Iran claimed it was finally ready to implement basic controls to counter illicit finance, but the
regime has failed to live up to its commitments,” said Secretary Steven T. Mnuchin. “We
commend FATF for calling on our partners around the world to take concrete steps to impose
financial restrictions to protect the global financial system from Iranian threats.”
“The U.S. applauds the condemnation of Iran’s failure to combat money laundering and terrorist
financing, a consensus decision of 39 FATF members,” said Assistant Secretary for Terrorist
Financing Marshall Billingslea. “We urge countries around the world to take meaningful steps to
prevent Iran from using the international financial system for illicit purposes. The safety and
security of the international financial system depends upon it.”

FATF CALLS ON COUNTRIES TO IMPLEMENT COUNTERMEASURES ON IRAN
The FATF called on all jurisdictions to impose e ective countermeasures on Iran, such as
requiring financial institutions to review, amend, or if necessary terminate correspondent
relationships with Iranian banks or limiting business relationships or financial transactions with
Iran. The countermeasures should be developed and implemented to protect the international
financial system from the ongoing money laundering, terrorist financing, and proliferation
financing (ML/TF/PF) risks emanating from Iran.

THIRD-YEAR FOLLOW UP OF THE UNITED STATES
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Financial Action Task Force (FATF) Calls for Countermeasures on Iran, Evaluates U.S. AML Framework, Releases Digital Identity Guida…

As part of a follow-up process, the FATF discussed the changes made by the United States to
improve the AML/CFT system since the 2016 Mutual Evaluation Report, including Treasury’s CDD
rulemaking and beneficial ownership requirements that went into e ect in 2018. The United
States also joined Switzerland as one of the first countries to voluntarily submit to an
assessment of its compliance with the new FATF standards regarding virtual assets. The results
of the FATF’s findings will be published a er they go through the FATF’s quality and consistency
process.

FATF RELEASES GUIDANCE ON DIGITAL IDENTITY
The FATF also issued guidance on the issue of digital identity systems for customer
identification and verification. This guidance explains how digital ID systems could meet FATF’s
customer due diligence requirements and will assist governments and financial institutions
worldwide to apply a risk-based approach to using digital ID systems.

FATF UPDATES REPORT ON ISIL AND AL-QAEDA
FATF adopted its twel h non-public update on the financing of ISIL, Al-Qaeda and a iliate
groups. The report notes the growing trend of ISIL a iliates generating their own revenue and
relying less on funds sent from Syria and Iraq. This decentralization and growing independence
of ISIL a iliates are increasing the terrorist financing risk from ISIL throughout the FATF global
network. The report also details Al-Qaeda financial links and support to its a iliates,
highlighting the ongoing threat of Al-Qaeda to international peace and security.

IDENTIFYING COUNTRIES WITH STRATEGIC AML/CFT
DEFICIENCIES
The FATF also called on all countries to apply countermeasures on North Korea due to the
ongoing money laundering, terrorist financing, and weapons of mass destruction proliferation
financing risks to the international financial system. In addition, the Plenary identified new
countries as well as updated statements of countries that are working with the FATF to
implement an Action Plan and strengthen their domestic frameworks. FinCEN will release an
advisory updating financial institutions to the FATF list of jurisdictions with strategic AML/CFT
deficiencies.

ADOPTION OF MUTUAL EVALUATION REPORTS OF THE
REPUBLIC OF KOREA AND THE UNITED ARAB EMIRATES
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Financial Action Task Force (FATF) Calls for Countermeasures on Iran, Evaluates U.S. AML Framework, Releases Digital Identity Guida…

The Mutual Evaluation Reports of the Republic of Korea and the United Arab Emirates were also
adopted and will be published on the FATF website in the near future, representing the
culmination of a peer review by FATF members to assess both jurisdictions’ AML/CFT and
counter-proliferation financing legal frameworks as well as the measures in place to implement
these frameworks e ectively.
Outcomes of the FATF Plenary, 19-21 February 2020

The Financial Action Task Force (FATF) is an international policy-making and standard-setting
body, headquartered in Paris, dedicated to combating money laundering and terrorist
financing. Treasury’s Assistant Secretary for Terrorist Financing and Financial Crimes leads the
U.S. delegation to FATF.
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