On 7 May 2020, the European Commission adopted a Delegated Regulation amending Delegated Regulation (EU) 2016/1675 supplementing the Fourth Anti-Money Laundering Directive as regards the Bahamas, Barbados, Botswana, Cambodia, Ghana, Jamaica, Mauritius, Mongolia, Myanmar/Burma, Nicaragua, Panama and Zimbabwe to the table in point I of the Annex and deleting Bosnia-Herzegovina, Ethiopia, Guyana, Lao People’s Democratic Republic, Sri Lanka and Tunisia from this table.
Delegated Regulation (EU) 2016/1675 identifies those third countries that have strategic deficiencies in anti-money laundering and countering the financing of terrorism (AML / CFT) regimes that pose significant threats to the financial system of the EU.
The European Commission published a revised methodology for identifying high-risk third countries on 7 May 2020. Its key new elements are an increased interaction with the Financial Action Task Force (FATF) listing process; an enhanced engagement with the third countries; and reinforced consultation of Member States and the European Parliament.
Article 1 of the Delegated Regulation amends Delegated Regulation (EU) 2016/1675 by removing the following in the table under the point “I. High-risk third countries which have provided a written high-level political commitment to address the identified deficiencies an have developed an action plan with FATF: Bosnia-Herzegovina, Guyana, Lao People’s Democratic Republic, Ethiopia, Sri Lanka and Tunisia.
Article 2 of the Delegated Regulation makes amendments to the Annex to Delegated Regulation (EU) 2016/1675, the table under the point “I. High-risk third countries which have provided a written high-level political commitment to address the identified deficiencies and have developed an action plan with FATF”. The updated list refers to the following: Afghanistan, Bahamas, Barbados, Botswana, Cambodia, Ghana, Iraq, Jamaica, Mauritius, Mongolia, Myanmar/Burma, Nicaragua, Pakistan, Panama, Syria, Trinidad and Tobago, Uganda, Vanuatu, Yemen, Zimbabwe.
The Delegated Regulation comes into force on the twentieth day following its publication in the Official Journal of the EU. However, the new list of jurisdictions in Article 2 does not come into force until 1 October 2020. The new list will likely impact multiple anti-financial crime controls including customer due diligence; customer risk assessment; business wide risk assessment; policies and procedures; and training. Given the UK will still be in the Brexit transition period on this date, the UK will be obliged to comply alongside the EU Member States.