The UK has named 21 high-risk countries in the first anti-money laundering and combatting the financing of terrorism (AML/CFT) regulations framed by the country since Brexit when it withdrew from the EU.
The new regulations naming the high-risk countries, which mirror the list of countries that the Financial Action Task Force (FATF) has concerns over, require the UK regulated sector to apply enhanced customer due diligence in relation to high-risk countries.
This UK list also matches the EU list after the European Commission in May 2020 announced a revised list of high-risk third countries so that the EU’s list aligns with the FATF list.
Change of jurisdiction
The UK government has published the Money Laundering and Terrorist Financing (Amendment) (High-Risk Countries) Regulations 2021 on its website together with an explanatory memorandum.
Until the end of the Brexit transition on 31 December 2020, the list of high-risk countries for the UK was determined by the EU.
The regulations remove references to the European Commission’s list of high-risk third countries.
The UK’s new list of high-risk countries replicates those countries listed by the FATF as high risk or under increased monitoring.
The new regulations require relevant persons to take geographical risk factors into account when assessing risk and the extent of measures which should be taken to manage and mitigate that risk.
These risk factors are stated as including whether a country is identified by a credible source, including reports published by the FATF, as not implementing AML/CFT requirements consistent with FATF recommendations.
The UK’s Money Laundering and Terrorist Financing (Amendment) (High-Risk Countries) Regulations can be found here.
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