EU Updates High-Risk Country List

The European Commission (Commission) announced changes to its list of high-risk countries under the Fourth Anti-Money Laundering Directive (4MLD). On March 14, 2024, the Commission adopted a Delegated Regulation revising Delegated Regulation 2016/1675. This update involves the addition of Kenya and Namibia to the list in point I of the Annex, while removing Barbados, Gibraltar, Panama, Uganda, and the United Arab Emirates from that list.

Article 9(2) of the 4MLD authorizes the Commission to enact delegated acts to identify third-country jurisdictions with high-risk and strategic deficiencies in their anti-money laundering/counter-financing of terrorism (AML/CFT) regimes. In July 2016, the Commission issued Delegated Regulation 2016/1675, which initially identified several high-risk third countries. This regulation has undergone subsequent amendments over time.

During its plenary meeting in February 2024, the Financial Action Task Force (FATF) updated its list of ‘Jurisdictions under Increased Monitoring’ by including Kenya and Namibia while removing Barbados, Gibraltar, Uganda, and the United Arab Emirates.

The Commission’s decision to add Kenya and Namibia stems from their identified strategic deficiencies in AML/CFT regimes, with consideration given to their inclusion in the FATF’s ‘Jurisdictions under Increased Monitoring’ list. Therefore, these countries align with the criteria outlined in Article 9(2) of the 4MLD and warrant inclusion in Delegated Regulation (EU) 2016/1675 as high-risk third countries.

Furthermore, the Commission has assessed the progress made by Barbados, Gibraltar, Uganda, and the United Arab Emirates in addressing their strategic deficiencies in line with the 4MLD requirements. Consequently, these jurisdictions are no longer deemed to have significant deficiencies in their AML/CFT frameworks and do not pose substantial threats to the EU’s financial system.

While Panama was removed from the FATF’s list in October 2023, it remained classified as a high-risk third country by the EU due to persistent strategic deficiencies, particularly concerning beneficial ownership transparency. However, subsequent information has indicated that Panama has made strides in addressing these deficiencies.

The Delegated Regulation will come into effect twenty days after its publication in the Official Journal of the EU.

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