The Money Laundering and Terrorist Financing (Amendment) Regulations 2019 (MLRs 2019) require the UK regulated sector to apply enhanced customer due diligence in relation to high-risk countries.
The Money Laundering and Terrorist Financing (Amendment) (High-Risk Countries) Regulations 2021 came into force on 26 March 2021.
Previously a high-risk third country was a country that had been identified by the European Commission in delegated acts adopted under Article 9.2 of the Fourth Money Laundering Directive.
However, the implementation of this new legislation, means that relevant persons in the UK will be required to apply enhanced due diligence by virtue of Regulation 33.3a to business relationships with a person based in a country listed by the Financial Action Task Force (FATF), and to transactions where either of the parties is based in a county listed by the FATF.
The UK’s High-Risk Third Country list is now aligned with the FATF’s 2 lists: Jurisdictions under Increased Monitoring, and High-Risk Jurisdictions subject to a Call for Action.