Section 17H: High risk country

17H. High risk country (1) Where a jurisdiction is identified by the Financial Action Task Force as having significant or strategic deficiencies in its AML/CFT measures, the Minister may – (a) on the recommendation of the National Committee; and (b) after giving due consideration to such factors as may be prescribed, identify that jurisdiction as a high risk country. (2) A reporting person shall, with respect to business relationships or transactions involving a high risk country, apply such enhanced CDD measures as may be prescribed. (3) In addition to subsection (2), a reporting person shall, where applicable and proportionate to the risks, apply one or more of the following additional mitigating measures to persons and legal entities carrying out transactions involving a high risk country – (a) the application of additional elements of enhanced due diligence; (b) the introduction of enhanced relevant reporting mechanisms or systematic reporting of financial transactions; (c) the limitation of business relationships or transactions with natural persons or legal entities from the countries identified as high risk countries. (4) Where the Minister identifies a high risk country under subsection (1), he shall, on the recommendation of the Financial Action Task Force or the National Committee, and having regard to the level of the risk, specify that one or more 166 Acts 2019 of the following countermeasures, and any other measures that have a similar effect in mitigating risks, shall apply to the high risk country – (a) refusing the establishment of subsidiaries or branches or representative offices of reporting persons from the country concerned, or otherwise taking into account the fact that the relevant reporting person is from a country that does not have adequate AML/CFT systems; (b) prohibiting reporting persons from establishing branches or representative offices in the high risk country, or otherwise taking into account the fact that the relevant branch or representative office would be in a country that does not have adequate AML/CFT systems; (c) limiting business relationships or financial transactions with the identified country or persons in that country; (d) prohibiting reporting persons from relying on parties located in the country concerned to conduct elements of the CDD process; (e) requiring reporting persons to review and amend, or if necessary terminate, correspondent banking and other similar relationships with institutions in the country concerned; (f) requiring increased supervisory examination and external audit requirements for branches and subsidiaries of reporting persons based in the country concerned; Acts 2019 167 (g) requiring increased external audit requirements for financial groups with respect to any of their branches and subsidiaries located in the country concerned. (5) FIU shall immediately disseminate to reporting persons in such manner as it may determine – (a) any high risk country identified by the Minister under subsection (1); (b) any countermeasures which are applicable on the country; (c) the concerns regarding the weaknesses in the AML/CFT systems of that country; and (d) any publicly available information published by the Financial Action Task Force on any jurisdiction which has been identified by it as having significant or strategic deficiencies in its AML/CFT measures. (l) in section 18 – (i) in subsection (3), by deleting the words “on the ground that it is carrying on its business in a under subsection (1); (b) any countermeasures which are applicable on the country; (c) the concerns regarding the weaknesses in the AML/CFT systems of that country; and (d) any publicly available information published by the Financial Action Task Force on any jurisdiction which has been identified by it as having significant or strategic deficiencies in its AML/CFT measures. (l) in section 18 – (i) in subsection (3), by deleting the words “on the ground that it is carrying on its business in a manner which is contrary or detrimental to the interest of the public”; (ii) by repealing subsections (3A) and (4); (m) in section 19(1), by repealing paragraph (c), the word “or” being added at the end of paragraph (b); (n) in section 19A, by inserting, after paragraph (b), the following new paragraph – (ba) a representative of the Ministry; (o) in section 19B, by deleting the words “proliferation offences” wherever they appear and replacing them by the word “proliferation”; 168 Acts 2019 (p) in section 19D, by repealing subsection (3) and replacing it by the following subsection – (3) The Ministry shall, to the extent possible, make available the findings of the national risk assessment to – (a) every supervisory and investigatory authority and the Registrars for the purpose of subsection (4); and (b) reporting persons, in order to assist them to identify, understand, manage and mitigate the risk of money laundering and terrorism financing and proliferation. (q) by inserting, after Part IVA, the following new Part – PART IVB – SUPERVISION BY REGULATORY BODIES Sub-Part A – Application of Part IVB