High-risk third countries for AML purposes
The latest amendments to Schedule 3ZA came into force on 5 December 2023.
Bulgaria, Cameroon, Croatia, Nigeria, South Africa and Vietnam have been added to the list and Albania, the Cayman Islands, Jordan and Panama have been removed.
The high-risk third countries are:
- Burkina Faso
- Democratic People's Republic of Korea (DPRK)*
- Democratic Republic of the Congo
- South Africa
- South Sudan*
- United Arab Emirates
*These jurisdictions are subject to financial sanctions measures, which require firms to take additional measures.
Schedule 3ZA consolidated the Financial Action Task Force's (FATF) jurisdictions under increased monitoring and high-risk jurisdictions subject to a call for action into a single list of countries.
All countries included in FATF's lists have significant shortcomings in their AML, counter-terrorist financing and counter-proliferation financing controls.
HM Treasury also published an updated advisory notice on high-risk third countries.
BackgroundUnder the UK’s AML regime (regulation 33(1)(b)), any business relationship with a person established in a high-risk third country must be subject to enhanced due diligence (EDD).
Until the end of the Brexit transition period, the list of high-risk countries was determined by the European Union (EU).
From 1 January 2021, the UK has had its own standalone list. Since then, any amendments to the EU list do not have effect in the UK.
The UK is entitled to amend its own list of high-risk countries under section 49 of the Sanctions and Anti Money Laundering Act 2018.
The aim remains tackling strategic deficiencies in the identified countries with regards to their national AML and counter-financing of terrorism regimes.
You must apply 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 anti-money laundering guidance for the legal sector.
The list was later amended in four delegate regulations:
Since the end of the Brexit transition period, the list has been amended in:
- December 2023 by the Money Laundering and Terrorist Financing (High-Risk Countries) (Amendment) (No. 2) Regulations 2023
- March 2022 by the Money Laundering and Terrorist Financing (Amendment) (High-Risk Countries) Regulations 2022
- July 2021 by the Money Laundering and Terrorist Financing (Amendment) (No 2) (High-Risk Countries) Regulations 2021
- November 2021 by regulation 2 of the Money Laundering and Terrorist Financing (Amendment) (No 3) (High-Risk Countries) Regulations 2021
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