FinCEN Urges Firms to Tighten Proliferation Finance Controls

The latest Financial Action Task Force (FATF) update underscores a rapidly shifting global landscape for anti money laundering, counter terrorist financing, and counter proliferation finance compliance.

FinCEN has urged financial institutions to reassess their risk exposure in light of FATF’s revised lists, with particular emphasis on continued countermeasures against Iran and the DPRK. The October FATF plenary removed Burkina Faso, Mozambique, Nigeria, and South Africa from Increased Monitoring, signalling improvements in their frameworks. However, high-risk jurisdictions remain a critical concern.

Iran and the DPRK continue to require robust countermeasures, while Burma remains subject to enhanced due diligence. These classifications carry real implications for correspondent banking relationships, sanctions exposure, and institutions’ wider risk-based controls. FinCEN has reminded firms that enhanced due diligence should be proportionate and must not lead to indiscriminate de-risking, a practice widely criticised for pushing financial activity outside regulated channels.

With proliferation finance threats intensifying and geopolitical tensions driving renewed focus on nuclear and missile risks, institutions operating internationally must ensure that AML, CFT, and CPF controls are integrated, intelligence-led, and aligned with both FATF expectations and domestic sanctions regimes. This update highlights the need for agile compliance frameworks capable of responding swiftly to regulatory developments across multiple jurisdictions.

Read the press release here.