What changed
RBI updated its earlier May 2011 circular with FATF's June 2011 statement, advising counter-measures against Iran and DPRK. It also added eight jurisdictions with strategic AML/CFT deficiencies that require risk consideration before business relationships.
What it means for you
Indian agents must now treat Iran and DPRK as high-risk for money laundering and terrorist financing, applying enhanced due diligence or transaction restrictions. For the eight listed countries, a risk-based approach is needed, potentially increasing compliance costs and slowing cross-border remittances.
What you must do
- Update AML/CFT policies to include FATF counter-measures for Iran and DPRK.
- Consider risks from the eight listed jurisdictions when entering business relationships and transactions.
- Train staff on identifying and reporting suspicious transactions linked to these countries.
- Advise Principal Officer to acknowledge receipt of this circular to RBI.
Who it affects
Indian agents under Money Transfer Service Scheme, Authorised Persons handling cross-border inward remittances, Compliance and AML/CFT teams at banks and financial institutions
Does this circular ban all transactions with Iran?
No, it does not prohibit legitimate trade and business transactions with Iran, but requires application of FATF counter-measures to protect the financial system from ML/FT risks.
What are the eight new jurisdictions added?
Bolivia, Cuba, Ethiopia, Kenya, Myanmar, Sri Lanka, Syria, and Turkey are identified as having strategic AML/CFT deficiencies, requiring risk assessment before business relationships.
What legal backing does this circular have?
It is issued under FEMA 1999 (Sections 10(4) and 11(1)) and PMLA 2002, with non-compliance attracting penal provisions under those Acts and Rules.