HM Treasury has published a new statutory instrument coming into force tomorrow (15th November 2022). This substitutes the list of high risk third countries specified in schedule 3ZA of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (the ‘MLRs’). The list continues to mirror both the Financial Action Task Force’s (FATF) ‘Jurisdictions under increased monitoring’ and ‘High-risk jurisdictions subject to a call for action’ documents. High-risk jurisdictions’ anti-money laundering, anti-terrorism funding, and anti-proliferation financing regimes have significant strategic deficiencies.
Under the MLRs (regulation 33(1)(b)) any business relationship with a person established in a high-risk third country must be subject to enhanced due diligence (EDD).
The Democratic Republic of the Congo, Gibraltar, Mozambique and Tanzania have been added to the list and Malta, Nicaragua and Pakistan have been removed.
The high-risk third countries are:
- Burkina Faso
- Cayman Islands
- Democratic People’s Republic of Korea (DPRK)*
- Democratic Republic of the Congo
- South Sudan*
- United Arab Emirates
*These jurisdictions are subject to financial sanctions measures, which require firms to take additional measures.
On 14 November 2022, HM Treasury published an advisory notice on high-risk third countries.