What changed
RBI updated its earlier November 2009 guidance by incorporating FATF's June 2010 statement, which explicitly names Iran (subject to countermeasures) and DPRK and Sao Tome & Principe (strategic deficiencies without committed action plans). Agents must now factor these specific jurisdictions into their AML/CFT risk assessments.
What it means for you
Indian agents under MTSS must treat remittances from Iran, DPRK, and Sao Tome & Principe as higher risk, potentially requiring enhanced due diligence or transaction restrictions. Non-compliance with these KYC/AML norms invites penal action under FEMA and PMLA. This aligns India's cross-border remittance framework with global FATF standards.
What you must do
- Update your AML/CFT risk assessment to include Iran, DPRK, and Sao Tome & Principe as high-risk jurisdictions.
- Apply enhanced due diligence or countermeasures for all inward remittances from or involving these countries.
- Brief your Principal Officer and compliance team on the updated FATF list and RBI circular.
- Communicate the new requirements to your downstream constituents and agents handling MTSS transactions.
Who it affects
Authorised Persons (Indian Agents) under Money Transfer Service Scheme, Compliance and AML teams of MTSS agents, Principal Officers of MTSS agents
Which jurisdictions are now flagged as high-risk under this circular?
Iran (subject to countermeasures), Democratic People's Republic of Korea (DPRK), and Sao Tome & Principe (strategic AML/CFT deficiencies without committed action plans).
What actions must MTSS agents take for remittances from these countries?
Agents must assess and mitigate risks from these jurisdictions, potentially applying enhanced due diligence or countermeasures as per FATF guidance, and ensure compliance with PMLA and FEMA.
What are the consequences of non-compliance?
Non-compliance attracts penal provisions under FEMA, 1999 and PMLA, 2002, as amended, and related rules.