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European Commission list of high-risk third countries
Article 9.2 of the 4th EU Money Laundering Directive (Fourth Directive) allows the European Commission (EC) to identify 'high-risk third countries'.
These countries are identified as having strategic deficiencies in their national anti-money laundering and counter-financing of terrorism regimes that pose significant threats to the EU’s financial system.
You must apply enhanced due diligence (EDD) measures in any transaction or business relationship with a person established in a high-risk third country.
For more guidance on appropriate EDD measures, see our guide to customer due diligence and the Legal Sector Affinity Group’s Anti-money laundering guidance for the legal sector.
High-risk third countries
The EU’s 5th Money Laundering Directive broadened the criteria for the EC in assessing high-risk third countries.
Twenty-two countries have currently been identified as high-risk third countries for money laundering and terrorist financing. They are:
- The Bahamas
- Democratic People's Republic of Korea (DPRK) – has repeatedly failed to address deficiencies
- Iran – seeking technical assistance in the implementation of the FATF Action Plan
- Trinidad and Tobago
The list was later amended in four delegate regulations: