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The European Commission has updated its list of “high risk” third country jurisdictions presenting strategic deficiencies in their anti-money laundering/countering the financing of terrorism (AML/CFT) regimes.
Two third-country jurisdictions were added to it: Nigeria and South Africa, while two other jurisdictions were taken off the list – Cambodia and Morocco.
This list takes into account the changes decided at the last FATF Plenary of February.
Considering the level of financial systems’ integration, the Single Market would be exposed to serious risks of money laundering and terrorist financing if the EU were not to consider adding jurisdictions identified by the FATF to the EU list.
As a founding member of the FATF, the European Commission says it is closely involved in the monitoring of the progress of the listed jurisdictions on addressing their shortcomings in AML/CFT and on implementing fully their respective action plans as agreed with the FATF.
European financial institutions and other gatekeepers such as notaries, lawyers and accountants (called ‘obliged entities’ in the directive) are required to apply enhanced vigilance in transactions involving high-risk third-country jurisdictions (so-called ‘enhanced customer due diligence requirements’).
Under the 4th Anti-money Laundering Directive, the Commission is mandated to adopt and update such a list regularly in order to take into account information from international organisations and standard setters in the field of AML/CFT, such as the FATF.
The update of the list of high-risk third-country jurisdictions takes the legal form of a delegated regulation which will enter into force after scrutiny and non-objection of the European Parliament and the Council over a period of one month (which can be prolonged for another month).