Capital Markets Authority: Stricter auditing for entities linked to high-risk countries

The Capital Markets Authority issued a circular regarding countries that do not apply or inadequately apply the recommendations of the Financial Action Task Force (FATF), urging all licensed persons to review the updated list of these countries, scrutinize business relationships and transactions associated with them, and classify them as high-risk, thereby requiring the implementation of prescribed anti-money laundering and counter-financing of terrorism measures. The Authority explained in its circular that this measure is based on Article 3-38 of Book Sixteen, “Combating Money Laundering and Financing of Terrorism,” of the Executive Regulations of Law No. 7 of 2010 concerning the establishment of the Capital Markets Authority and the regulation of securities activities, and its amendments. According to the circular, licensed persons must exercise due care and diligence in business relationships and transactions conducted with clients or financial institutions from countries that do not apply or inadequately apply the FATF recommendations, emphasizing that if the Authority notifies a licensed person that a country does not adequately apply the recommendations, all business relationships and transactions originating from that country must be considered high-risk, and the procedures stipulated in Article 3-18 of the same chapter must be applied. The Authority noted that the FATF updated its list of countries that do not apply or inadequately apply its recommendations during its last meeting held in October 2026, urging licensed persons to visit the FATF’s official website to review the updated list and take necessary actions in accordance with applicable regulatory requirements.