Under the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 (“the 2010 Act as amended”) as amended, a high-risk third country means a jurisdiction identified by the European Commission in accordance with Article 9 of the Fourth Money Laundering Directive. Based on Directive (EU) 2015/849, Article 9, the Commission is mandated to identify high-risk third countries having strategic deficiencies in their regime on anti-money laundering and countering the financing of terrorism. Further information on those countries the Commission considers high risk can be found at this link: https://finance.ec.europa.eu/financial-crime/high-risk-third-countries-and-international-context-content-anti-money-laundering-and-countering_en
The Commission’s consolidated list as of 13.03.22 can be found here.
There are various references to high risk third countries in the 2010 Act as amended, including an obligation to undertake enhanced customer due diligence in this regard. Schedule 4 of the 2010 Act as amended, sets out a non-exhaustive list of factors suggesting potentially higher risk which designated persons should take into account in adopting the required risk-based approach. Amongst the factors are customers that are resident in geographical areas of higher risk including countries identified by credible sources, such as mutual evaluations, detailed assessment reports or published follow-up reports, as not having effective AML/CFT systems; countries identified by credible sources as having significant levels of corruption or other criminal activity; countries subject to sanctions, embargos or similar measures issued by organisations such as, for example, the European Union or the United Nations; countries (or geographical areas) providing funding or support for terrorist activities, or that have designated terrorist organisations operating within their country.
In that regard those countries identified by the Financial Action Task Force (FATF) should be considered. The FATF identifies jurisdictions with weak measures to combat money laundering and terrorist financing (AML/CFT) in two FATF public documents that are issued three times a year. Further information on those jurisdictions identified by FATF can be found here: https://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/?hf=10&b=0&s=desc(fatf_releasedate)
Jurisdictions under increased monitoring by FATF as of June 2022 can be found here https://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/increased-monitoring-june-2022.html Jurisdictions under increased monitoring are actively working with the FATF to address strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing. When the FATF places a jurisdiction under increased monitoring, it means the country has committed to resolve swiftly the identified strategic deficiencies within agreed timeframes and is subject to increased monitoring. This list is often externally referred to as the “grey list”.
High-risk jurisdictions have significant strategic deficiencies in their regimes to counter money laundering, terrorist financing, and financing of proliferation. For all countries identified as high-risk, the FATF calls on all members to apply enhanced due diligence, and, in the most serious cases, countries are called upon to apply counter-measures to protect the international financial system from the money laundering, terrorist financing, and proliferation financing (ML/TF/PF) risks emanating from the country. This list is often externally referred to as the “black list”. Since February 2020, in light of the COVID-19 pandemic, the FATF has paused the review process for countries in the list of High-Risk Jurisdictions subject to a Call for Action, given that they are already subject to the FATF’s call for countermeasures. Currently DPRK and Iran are on the list – see https://www.fatf-gafi.org/publications/high-risk-and-other-monitored-jurisdictions/documents/call-for-action-february-2020.html
In addition, the EU sanctions map is a useful reference in respect of countries subject to international sanctions. See https://www.sanctionsmap.eu/#/main