What changed
RBI issued a circular on August 18, 2011, forwarding the FATF's June 24, 2011 statement on jurisdictions with AML/CFT deficiencies. This updates the earlier April 8, 2011 circular that had shared the FATF's initial list. Operators are now required to consider the new statement and ensure their compliance frameworks address these risks.
What it means for you
Payment system operators must integrate the updated FATF list into their AML/CFT risk assessments and due diligence processes. This ensures alignment with global standards and helps prevent misuse of payment systems for money laundering or terrorist financing. Non-compliance could expose operators to regulatory scrutiny and reputational risk.
What you must do
- Review the enclosed FATF statement from June 24, 2011, and update your AML/CFT policies accordingly.
- Ensure your compliance team incorporates the listed jurisdictions into transaction monitoring and screening systems.
- Have your Nodal Officer or Principal Officer acknowledge receipt of this circular to RBI.
- Maintain records of actions taken to address the FATF statement for audit and regulatory review.
Who it affects
All payment system operators authorised under the Payment and Settlement Systems Act, 2007, Compliance and AML/CFT teams at payment operators, Nodal Officers and Principal Officers of these entities
What is the purpose of this circular?
It directs payment system operators to consider the FATF's June 2011 statement on jurisdictions with strategic AML/CFT deficiencies, ensuring they stay updated on global risks and align their compliance measures.
Do I need to take any action if my operator already complies with AML/CFT norms?
Yes, you must review the new FATF statement and update your risk assessments and screening processes accordingly. Also, ensure your Nodal Officer acknowledges receipt of this circular.
What happens if we ignore this circular?
Ignoring it could lead to regulatory non-compliance, increased scrutiny from RBI, and potential penalties. It also raises the risk of your systems being exploited for illicit activities.