On 23 January 2024, the Money Laundering and Terrorist Financing (High-Risk Countries) (Amendment) Regulations 2024 (the statutory instrument (SI)) was published along with an explanatory memorandum.
The purpose of the SI is to amend regulation 33(3)(a) of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (the MLRs) to redefine “high-risk third countries” (HRTCs) as those countries identified by the Financial Action Task Force (FATF) in the lists it publishes from time to time, as “High-Risk Jurisdictions Subject to a Call for Action” and “Jurisdictions Under Increased Monitoring”. The SI also removes Schedule 3ZA to the MLRs, which sets out the list of “High-Risk Third Countries” in respect of which extra customer due diligence measures must be taken by relevant persons under the MLRs.
The changes introduced by the SI are intended to streamline updates to the HRTCs in respect of which regulated businesses must carry out enhanced due diligence. The explanatory memorandum notes that referring businesses directly to the jurisdictions published in the FATF lists, rather than a separate schedule in the MLRs, removes the need for up to three SIs per year in order to keep the UK’s list of HRTCs in alignment with the FATF lists. The SI entered into force on 23 January 2024.