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In jurisdictions that have failed to make adequate progress in addressing the serious deficiencies previously identified by the FATF, in addition to the application of Recommendation 21, the FATF recommends the application of further counter-measures which should be gradual, proportionate and flexible regarding their means and taken in concerted action towards a common objective. The FATF believes that enhanced surveillance and reporting of financial transactions and other relevant actions involving these jurisdictions would now be required, including the possibility of:
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Stringent requirements for identifying clients and enhancement of advisories, including jurisdiction-specific financial advisories, to financial institutions for identification of the beneficial owners before business relationships are established with individuals or companies from these countries;
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Enhanced relevant reporting mechanisms or systematic reporting of financial transactions on the basis that financial transactions with such countries are more likely to be suspicious;
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In considering requests for approving the establishment in FATF member countries of subsidiaries or branches or representative offices of banks, taking into account the fact that the relevant bank is from an NCCT;
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Warning non-financial sector businesses that transactions with entities within the NCCTs might run the risk of money laundering.
As with Recommendation 21, the FATF itself does not determine what specific measures financial institutions and non-financial businesses must take. It is up to each country to specifically determine how to apply the counter-measures.
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