The European Commission, on 17th May 2023, has updated its list of high-risk third-country jurisdictions for anti-money laundering (AML) and countering the financing of terrorism (CFT).
See announcement here
Added Jurisdictions: Nigeria and South Africa have been identified as jurisdictions with strategic deficiencies in their AML/CFT regimes.
Delisted Jurisdictions: Cambodia and Morocco have been removed from the list due to improvements in their AML/CFT systems.
Basis for Updates
The European Commission's updates to the list of high-risk third-country jurisdictions are based on information from the Financial Action Task Force (FATF) and its recent Plenary decisions.
Monitoring and Progress
The European Commission (EC), as one of the founding members of the Financial Action Task Force (FATF), keeps a close eye on the listed jurisdictions.
The EC carefully watches how these jurisdictions are working to improve their AML/CFT practices and their efforts to implement the action plans approved by the FATF.
Actions by obliged entities
Compliance professionals, such as financial institutions, notaries, lawyers, and accountants (known as "obliged entities"), must apply enhanced customer due diligence for customers with links to high risk countries, including scrutiny of financial activities.
Implementation of Updates
The updates to the list will be implemented through a delegated regulation, subject to scrutiny and non-objection by the European Parliament and the Council.
Staying up to date with these regulatory developments is important for compliance professionals to ensure that they implement measures and procedures to proactively detect potential ML/TF risks.
This proactive approach enables them to fulfill their responsibilities and maintain a robust and compliant environment within their organization.