Higher-Risk Countries

One of the key changes brought about by Brexit is the ability of the UK to set out its own AML legislation and on 26 March 2021, it took its first steps down that road when the Money Laundering and Terrorist Financing (Amendment) (High-Risk Countries) came into effect.

This piece of legislation amended Regulation 33 of the MLR 2017 in relation to the obligation to apply enhanced customer due diligence.

Previously this paragraph had determined a “higher risk third country” as identified by the European Commission but a list of these higher-risk jurisdictions has been set out by the UK by way of Schedule 3ZA:

1. Albania
2. Barbados
3. Botswana
4. Burkina Faso
5. Cambodia
6. Cayman Islands
7. Democratic People’s Republic of Korea
8. Ghana
9. Iran
10. Jamaica
11. Mauritius
12. Morocco
13. Myanmar
14. Nicaragua
15. Pakistan
16. Panama
17. Senegal
18. Syria
19. Uganda
20. Yemen
21. Zimbabwe

It should be noted that an EAB or AMP should still be mindful of the list published by the EU as the majority of countries will appear on both lists.

In addition, a third list of jurisdictions that are deemed to pose a greater AML risk are also maintained by the Financial Action Task Force (FATF) and again there is a commonality between all three lists. The FATF list can be found here.