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HM Treasury publishes revised list of high-risk third countries

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On 14 November 2022 HM Treasury published a revised list of high-risk third countries.

Under the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (“MLRs”), regulated firms in the UK are required to apply enhanced customer due diligence (EDD) in relation to high-risk third countries. The EDD measures and enhanced ongoing monitoring must be applied in any business relationships with a person established in a high-risk third country or in relation to any relevant transaction where either of the parties to the transaction is established in a high-risk third country.

The amendments that came into force on 7 November 2022 are reflected in the Money Laundering and Terrorist Financing (High-Risk Countries) (Amendment) (No.3) Regulations 2022 and replace the list of high-risk third countries specified in Schedule 3ZA of the MLRs with a new list.

It should be noted that this list continues to mirror the Financial Action Task Force’s (FATF) ‘Jurisdictions under increased monitoring’ and ‘High-risk jurisdictions subject to a call for action’ and it is consolidated into a single list of countries under the Schedule 3ZA, as all countries included in either of the FATF’s lists have significant shortcomings in their anti-money laundering, counter terrorist financing and counter-proliferation financing controls.

Amongst other changes, is the removal of Pakistan from the list of high-risk third countries, following completion of the FATF action plans.

SCHEDULE 3ZA High-Risk Third Countries

1.  Albania

2.  Barbados

3.  Burkina Faso

4.  Cambodia

5.  Cayman Islands

6.  Democratic People’s Republic of Korea

7.  Democratic Republic of the Congo

8.  Gibraltar

9.  Haiti

10.  Iran

11.  Jamaica

12.  Jordan

13.  Mali

14.  Morocco

15.  Mozambique

16.  Myanmar

17.  Panama

18.  Philippines

19.  Senegal

20.  South Sudan

21.  Syria

22.  Tanzania

23.  Turkey

24.  Uganda

25.  United Arab Emirates

26.  Yemen

For more information

It is important to ensure that your control mechanisms, whether automated or manual, reflect this change to the high-risk third countries and your customer relationships are appropriately assessed, managed and monitored, in accordance with the requirements for EDD.

For more information about how to apply EDD measures, as well as detailed information about the jurisdictions currently and previously listed, click the links below:

HM Treasury Advisory Notice: High Risk Third Countries

FAFT Advisory Notice on Outcomes pdf

Neopay can assist you in ensuring your systems and controls are adhering to the regulatory requirements and provide support in updating your financial crime framework. Contact us here to find out more.

 

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