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THE KYC DICTIONARY
High Risk Jurisdictions
Definition
In general, high-risk jurisdictions refer to countries or regions identified as having significant deficiencies in their regulatory and legal frameworks for combating money laundering, terrorist financing, and other financial crimes.
These jurisdictions often lack stringent anti-money laundering (AML) and counter-terrorism financing (CTF) measures, making them susceptible to being used for illicit financial activities.
Financial institutions and businesses are required to exercise enhanced due diligence when dealing with clients or transactions involving high-risk jurisdictions.
This includes more rigorous verification processes, closer scrutiny of financial activities, and ongoing monitoring to detect and mitigate potential risks associated with these regions.
Specific to the EU Commission, they are empowered to identify high-risk third countries which have strategic deficiencies in their anti-money laundering and countering the financing of terrorism frameworks. This reduces the risks that could pose threats to the EU's financial system.
The identification of high-risk counties is required in order to protect the EU financial system and the proper functioning of the internal market.
In line with the Directive (EU) 2018/843 (5th Anti-Money Laundering Directive), gatekeepers, such as banks, are obliged to carefully consider business relationships and transactions involving high-risk third countries through increased checks and control measures defined under Article 18a of the Directive.
Latest version of the list of high-risk third countries
On 12 December 2023, the European Commission adopted a new Delegated Regulation in relation to third countries which have strategic deficiencies in their AML/CFT regimes. The Delegated Regulation amends Delegated Regulation (EU) 2016/1675.
The following jurisdictions are identified as having strategic deficiencies in their AML/CFT regimes. Note these are listed as Name of high-risk third country: date of entry into force
- Afghanistan: 23 September 2016
- Barbados: 1 October 2020
- Burkina Faso: 13 March 2022
- Cameroon: 18 October 2023
- Democratic Republic of the Congo: 16 March 2023
- Gibraltar: 16 March 2023
- Haiti: 13 March 2022
- Iran: 23 September 2016
- Jamaica: 1 October 2020
- Mali: 13 March 2022
- Mozambique: 16 March 2023
- Myanmar: 1 October 2020
- Nigeria: 16 July 2023
- North Korea: 23 September 2016
- Panama: 1 October 2020
- Philippines: 13 March 2022
- Senegal: 13 March 2022
- South Africa: 16 July 2023
- South Sudan: 13 March 2022
- Syria: 23 September 2016
- Tanzania: 16 March 2023
- Trinidad and Tobago: 6 March 2018
- Uganda: 23 September 2016
- United Arab Emirates: 16 March 2023
- Vanuatu: 23 September 2016
- Vietnam: 18 October 2023
- Yemen: 23 September 2016
A consolidated version of the EU list is available (with only measures that have already entered into force).
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Reference: EU Anti-money laundering and countering the financing of terrorism at international level
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