The Money Laundering and Terrorist Financing (Amendment) Regulations 2019 (MLRs 2019) require the UK regulated sector to apply enhanced customer due diligence in relation to high-risk countries.
MLRs 2019 Regulation 33 (1) (b) requires regulated businesses (“relevant persons”) to apply enhanced customer due diligence measures and enhanced ongoing monitoring in any business relationship 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.
MLRs 2019 Regulation (33) (6) (c) requires that relevant persons take into account “geographical risk factors” 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 Financial Action Task Force (FATF), as not implementing requirements to counter money laundering and terrorist financing that are consistent with FATF recommendations.
Following the end of the Brexit transition period, the list of high-risk third countries is no longer determined by the EU and amendments made by the EU to their list no longer have effect in the UK
The current list of high-risk countries is set out in Schedule 3ZA of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.
The list was amended by regulation 2 of the Money Laundering and Terrorist Financing (Amendment) (High-Risk Countries) Regulations 2021).
The high-risk third countries are:
- Albania
- Barbados
- Botswana
- Burkina Faso
- Cambodia
- Cayman Islands
- Democratic People’s Republic of Korea (DPRK)
- Ghana
- Iran
- Jamaica
- Mauritius
- Morocco
- Myanmar
- Nicaragua
- Pakistan
- Panama
- Senegal
- Syria
- Uganda
- Yemen
- Zimbabwe
