FINTRAC Advisory Concerning Financial Transactions Related to High-Risk Countries Identified by FATF

On April 29, 2024, the Financial Transactions and Reports Analysis Centre (FINTRAC) issued an updated advisory (the “Advisory”) concerning financial transactions related to countries identified by the Financial Action Task Force (FATF) as high-risk jurisdictions and under increased monitoring.

Background

The Advisory follows two statements recently issued by the FATF:

• a statement on high-risk jurisdictions subject to a call for action which identifies jurisdictions for which the FATF has called on countries to apply countermeasures or enhanced due diligence; and
• a statement on jurisdictions under increased monitoring which identifies jurisdictions that have developed an action plan with the FATF to address deficiencies in their anti-money laundering and counter-terrorist financing strategies.

Takeaways from the Advisory

The Advisory focuses on key aspects of various FATF statements and notes FINTRAC expectations. The Advisory also references earlier statements issued by the FATF in respect of various matters concerning high-risk jurisdictions. (See our November 2022, March 2023, July 2023, and November 2023 updates relating to earlier advisories.)

The Advisory references the following notable changes:

• Kenya and Namibia are now subject to the FATF’s increased monitoring process and appear on the ‘grey list’.
• Barbados, Gilbraltar, Uganda, and the United Arab Emirates are no longer subject to increased monitoring.

FINTRAC also reiterates the Ministerial Directive it recently issued on financial transactions associated with Russia, pursuant to which reporting entities are required to:

• treat every financial transaction originating from or bound for Russia, regardless of its amount, as a high-risk transaction;
• verify the identity of any client (person or entity) requesting or benefiting from such a transaction in accordance with the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations;
• exercise customer due diligence, including ascertaining the source of funds or virtual currency in any such transaction, the purpose of the transaction and, where appropriate, the beneficial ownership or control of any entity requesting or benefiting from the transaction; and
• keep and retain a record of any such transaction, in accordance with the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations.

For further information concerning the matters referenced in the updated Advisory and what they might mean from a compliance perspective, please contact any member of our Financial Services Regulatory Group.

The author would like to thank Cathy Costa-Faria, Associate, for her assistance in writing this Update.