Financial Action Task Force Adds Turkey and Two Other Countries to Money Laundering Watchlist

[Asia Economy Reporter Jin-ho Kim] Turkey, Jordan, and Mali have been newly added to the list of 'Enhanced Due Diligence Countries' related to money laundering.

The Financial Services Commission announced on the 26th that this sanction proposal was discussed at the 5th plenary session of the 32nd FATF (Financial Action Task Force) held in Paris, France from the 19th to the 21st of this month.

FATF evaluates each country's compliance with FATF standards and publishes a list at every plenary session of 'High-Risk Jurisdictions under Increased Monitoring' that require action due to significant deficiencies and 'Enhanced Due Diligence Countries' that are in the process of remedying institutional deficiencies.

As a result of the plenary session, the 'High-Risk Jurisdictions under Increased Monitoring' remain the same as before, including Iran and North Korea. Among the 22 previously designated Enhanced Due Diligence Countries, 20 countries maintained their status, Botswana and Mauritius were removed, and Jordan, Mali, and Turkey were newly added to the Enhanced Due Diligence Countries list. In particular, Turkey's failure to adequately respond to money laundering and terrorist financing, mainly attributed to President Erdo?an, was analyzed as the primary cause.

Discussions related to virtual assets and virtual asset service providers (VASPs) also continued. FATF revised the guidance on the risk-based approach for virtual assets (VA) and virtual asset service providers (VASPs).

The revised guidance explains ▲the definitions of virtual assets and virtual asset service providers ▲the risks of virtual asset P2P transactions and measures for risk identification and mitigation ▲licensing and registration of virtual asset service providers ▲the Travel Rule ▲principles of information exchange and cooperation among supervisory authorities. The revised guidance will be published on the 28th.

The final report of the survey on cross-border payments was also adopted. The survey identified parts of national anti-money laundering and counter-terrorist financing (AML/CFT) laws and regulations that hinder the activation of cross-border payments through a private sector survey, and the final report of the survey was adopted.

Furthermore, as seen in the Pandora Papers, FATF concluded that ensuring transparency of beneficial ownership information of companies is crucial to prevent criminal activities and money laundering using complex corporate structures.

The Pandora Papers are documents revealed by the International Consortium of Investigative Journalists (ICIJ) exposing money laundering and illicit wealth accumulation by famous figures worldwide.

Accordingly, FATF is working on revising international standards, interpretative notes, and glossaries to strengthen international standards on beneficial ownership information of companies. At this plenary session, it was decided to approve private sector consultation on the proposed revisions.