What changed
RBI has updated its earlier November 2009 circular by incorporating the latest FATF statement dated June 25, 2010, which identifies jurisdictions with strategic AML/CFT deficiencies. Authorized persons must now consider this new FATF information in their risk assessments for money changing activities.
What it means for you
Banks and authorized persons must integrate the updated FATF list into their KYC/AML risk frameworks, particularly for money changing transactions. This reinforces the need for enhanced due diligence on customers from flagged jurisdictions to avoid regulatory penalties under FEMA and PMLA.
What you must do
- Review the enclosed FATF statement dated June 25, 2010, and update your internal AML/CFT risk assessment procedures accordingly.
- Ensure your Principal Officer acknowledges receipt of this circular to confirm compliance.
- Communicate the updated FATF guidance to all relevant branches and constituents involved in money changing activities.
- Incorporate the identified jurisdictions into your transaction monitoring and customer due diligence systems.
Who it affects
All authorized persons (banks, money changers, forex dealers), Principal Officers responsible for AML compliance, Constituents dealing with money changing activities
What is the key change from the earlier November 2009 circular?
The earlier circular advised considering FATF statements generally; this one specifically references the June 25, 2010 FATF statement and requires authorized persons to consider its information for risk assessment.
What are the consequences of non-compliance?
Non-compliance with these guidelines may attract penal provisions under the Foreign Exchange Management Act, 1999, and the Prevention of Money Laundering Act, 2002, as amended.
Do I need to take any action for this circular?
Yes, your Principal Officer must acknowledge receipt, and you should update your AML/CFT procedures to reflect the latest FATF statement and inform relevant constituents.