Under the 4AMLD and 5AMLD, Firms are required to apply enhanced due diligence on customers and transactions involving countries identified by the Commission as “high-risk third countries”. Announcing their new methodology for listing countries together with the financial crime action plan, the EU Commission has released the 2020 list of “high-risk third countries”.
New to the list this year (although measures are not yet in force) are: Bahamas, Barbados, Botswana, Cambodia, Ghana, Jamaica, Mauritius, Mongolia, Myanmar, Nicaragua, Panama, and Zimbabwe.
Coming off the list from last year are: Bosnia-Herzegovina, Ethiopia, Guyana, Laos, Sri Lanka, and Tunisia.
UK regulated entities have a specific obligation under the Money Laundering Regulations 2017 (as amended 2019), to apply EDD where either of the parties to a transaction is established in a high-risk third country.
On 7 May 2020, the European Commission adopted a new delegated regulation in relation to third countries which have strategic deficiencies in their AML/CFT regimes that pose significant threats to the financial system of the Union ('high-risk third countries'). Identification of such countries is a legal requirement stemming from Article 9 of Directive (EU) 2015/849 (4th Anti-Money Laundering Directive) and aiming at protecting the Union financial system and the proper functioning of the internal market.