Of relevance to:
All firms
Around one week after HM Treasury published its Consultation Paper on the Fourth Money Laundering Directive (“4MLD”) – see previous article “4MLD: HM Treasury Consultation” – a supplementing Directive (2016/1675) appeared in the Official Journal.
Article 18 of 4MLD imposes an Enhanced Customer Due Diligence requirement in certain circumstances such as dealing with e.g. Politically Exposed Persons (“PEPs”) and high-risk third countries. Although the former is defined in the Directive, the latter falls to the Commission to identify high-risk third countries.
The identified high-risk countries appear in the Annex to the short four-page Delegated Regulation 2016/1675.
Of the list of 11 countries in the Annex, 10 of them are a mixture of those that have provided a commitment to address identified deficiencies and have either developed an action plan with FATF or are seeking technical assistance in the implementation of the FATF Action Plan. The one exception is, as might be guessed, the Democratic People’s Republic of Korea, which is seen as an “ongoing and substantial money-laundering and terrorist-financing” risk.
