AML: Commission Updated List of High-Risk Third Countries
Under Directive (EU) 2015/849, the European Commission is responsible for identifying high-risk third countries with strategic deficiencies in their anti-money laundering and counter-financing of terrorism (AML/CFT) regimes. As set out in Art. 18a, this Directive requires banks and other financial institutions to exercise heightened vigilance when dealing with such high-risk third countries. The identification and listing of third countries whose AML/CFT regimes have strategic deficiencies aims to protect the integrity of the EU's financial system and internal market, reinforce internal security and promote sustainable development.
The Commission regularly updates the list of high-risk third-country jurisdictions, which takes the legal form of a delegated regulation (→ eucrim 2/2020, 89). It enters into force after scrutiny and non-objection by the European Parliament and the Council over a period of one month (which can be prolonged for another month). In May and and August 2023 the Commission adopted new Delegated Regulations pertaining to high-risk third countries. They were published in the Official Journal (L series) of 26 June 2023 and 28 September 2023, respectively.
The update of May 2023 added Nigeria and South Africa as third-country jurisdictions with strategic deficiencies in their AML/CFT regimes, while two other jurisdictions were delisted: Cambodia and Morocco. The update of August 2023 blacklisted Cameroon and Vietnam.
The Commission's assessment of high-risk third countries is based on a revised methodology adopted in May 2020 (→ eucrim 2/2020, 89). In total, the Commission identified 132 jurisdictions so far that will be further analyzed according to its methodology over the period 2018-2025. As a matter of priority a first group of 54 jurisdictions (Priority 1 countries) is reviewed and constantly reassessed when new relevant information sources become available. The other jurisdictions (Priority 2 countries) will be assessed successively until 2025. It is important to note that the Commission takes into account the list of "jurisdictions under increased monitoring" made up by the Financial Action Task Force (FATF), but the Commission assesses the countries and drafts the EU list autonomously.