FATF maintains countermeasures on Iran and North Korea, sets February 2027 progress deadline for Myanmar

The Financial Action Task Force (FATF) has reiterated its call for countermeasures against Iran and the Democratic People's Republic of Korea (DPRK), while retaining enhanced due diligence, not countermeasures, for Myanmar. The update maintains the distinction between the three jurisdictions established in its June assessment. For the DPRK, increased connectivity with the international financial system requires renewed enforcement of existing measures, including terminating correspondent relationships with DPRK banks, closing their overseas branches and subsidiaries, and limiting transactions with DPRK persons. Iran's September submission shows limited technical progress through a framework for receiving international asset freezing requests, but fundamental deficiencies remain in its terrorist financing offence and targeted financial sanctions regime. FATF calls for changes to primary legislation to remove exceptions or limitations inconsistent with its standards and international obligations. It also reiterates that Iran's reservations to international conventions remain overly broad. Countermeasures continue to cover financial institutions and virtual asset service providers, including restrictions on establishing operations in or from Iran, prohibitions on new correspondent relationships and reviews of existing relationships. Humanitarian and other specified financial flows must be handled on a risk basis. For Myanmar, FATF will consider countermeasures if no further progress is made by February 2027, replacing the October 2026 checkpoint stated in June. Financial institutions must intensify monitoring to identify unusual or suspicious activity. Outstanding deficiencies concern financial intelligence analysis and dissemination, and money laundering investigations and prosecutions consistent with risks. Extensive fraud and cyber scam activity remains an illicit finance threat despite some steps to address it. Enhanced due diligence must not disrupt or discourage humanitarian assistance, legitimate nonprofit activity or remittances. Both Myanmar and Iran remain listed until their respective action plans are completed.