On February 13, the European Commission adopted a Delegated Regulation (C(2019) 1326 final) which supplements the Fourth Money Laundering Directive ((EU) 2015/849) ("MLD4") by identifying 23 high-risk third countries with strategic deficiencies. The Delegated Regulation will repeal Delegated Regulation (EU) 2016/1675 which currently lists 16 countries as high-risk.
The 23 countries are listed in an annex to the new regulation, and the list will be updated as and when necessary, with the aim of further identifying high-risk third countries and to reflect progress made by listed countries.
Under article 18 of MLD4, firms are required to apply enhanced due diligence measures when dealing with financial operations involving customers and financial institutions from the high-risk third countries identified by the Commission. The aim is to protect the EU financial system by better preventing money laundering and terrorist financing risks.
The Commission has also published a set of FAQs and a press release setting out the next steps.
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