15 Feb 2019
The European Commission has published its list of high-risk third countries – dubbed the blacklist – which it says have weak anti-money laundering and terrorist financing regimes. It says the list was established after an ‘in-depth’ analysis, and the that the method reflected the ‘stricter’ criteria of the Fifth Anti-Money Laundering Directive (5AMLD).
In total, the Commission concluded that 23 countries have strategic deficiencies in their anti-money laundering/ counter terrorist financing regimes.
Meanwhile, blacklisted countries such as Panama and Saudi Arabia have reportedly disagreed with the EU listing.
So, what is the list all about and where did it all start? Here’s some answers:
What is the criteria used to establish the list?
Regarding the criteria to assess countries in the listing phase, this was initially set by the Fifth Anti-Money Laundering Directive and now includes the strategic deficiencies of those countries, regarding the legal and institutional anti-money laundering and counter-terrorist financing framework such as: criminalisation of money laundering and terrorist financing, customer due diligence and record keeping requirements.
What are the consequences of the listing for financial institutions?
Under the Fourth Anti-Money Laundering Directive, banks and other financial institutions have to apply extra checks (“enhanced customer due diligence requirements”) for transactions involving high-risk third countries identified on the list.
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