The European Commission has issued a new regulation to amend Delegated Regulation (EU) 2016/1675 by adding the Democratic Republic of the Congo, Gibraltar, Mozambique, Tanzania and the United Arab Emirates to Table I of the Annex and deleting Nicaragua, Pakistan, and Zimbabwe from that table. The regulation is aimed at ensuring the effective protection of the integrity and proper functioning of the financial system and the internal market of the Union from money laundering and terrorist financing.
The European Union has been identifying countries with strategic deficiencies in their regimes on Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) that pose significant threats to the financial system of the Union. In line with Article 9(4) of Directive (EU) 2015/849, the Commission takes the recent available information into account, in particular recent Financial Action Task Force (FATF) Public Statements, the FATF list of 'Jurisdictions under Increased Monitoring', and FATF reports of the International Cooperation Review Group in relation to the risks posed by individual third countries.
Since the latest amendments to Regulation (EU) 2016/1675, the FATF has significantly updated its list of 'Jurisdictions under Increased Monitoring'. At its plenary meeting in March 2022, the FATF added the United Arab Emirates (UAE) to its list and deleted Zimbabwe from its list. At its plenary meeting in June 2022, the FATF added Gibraltar to its list. At its plenary meeting in October 2022, the FATF added the Democratic Republic of the Congo (DRC), Mozambique and Tanzania to its list and deleted Nicaragua and Pakistan from its list. All those changes were assessed by the Commission in line with Article 9 of Directive (EU) 2015/849.
The UAE made a high-level political commitment in February 2022 to work with the FATF and the Middle East and North Africa Financial Action Task Force to strengthen the effectiveness of its AML/CFT regime. Since then, the UAE demonstrated positive progress, including by providing additional resources to the Financial Intelligence Unit (FIU) to strengthen the FIU analysis and providing financial intelligence to Law Enforcement Authorities and the Public Prosecutors for combating high-risk ML threats. The UAE should continue to work to implement its FATF action plan.
Despite that commitment and progress, the concerns that led to the listing of the UAE by the FATF have not yet been fully addressed. The UAE should therefore be considered as a country that has strategic deficiencies in its AML/CFT regime under Article 9 of Directive (EU) 2015/849.
In June 2022, Gibraltar made a high-level political commitment to work with the FATF and MONEYVAL, the Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism of the Council of Europe, to strengthen the effectiveness of its AML/CFT regime. Gibraltar has made progress on a significant number of its MER's recommended actions since the adoption of its MER in December 2019, such as completing a new national risk assessment, addressing the technical deficiencies in relation to Beneficial Owner-related recordkeeping, introducing transparency requirements for nominee shareholders and directors, strengthening the financial intelligence unit, and refining its ML investigation policy in line with risks.
The DRC, Mozambique and Tanzania have been identified as countries that have strategic deficiencies in their AML/CFT regimes. The FATF identified significant strategic deficiencies in their AML/CFT regimes, resulting in the countries being listed as 'Jurisdictions under Increased Monitoring'. The Commission has considered the recent available information, including FATF reports of the International Cooperation Review Group in relation to the risks posed by the three countries.
The European Commission has reviewed the progress made by Nicaragua, Pakistan, and Zimbabwe in addressing strategic deficiencies in their AML/CFT regimes, which led to their delisting by the FATF in 2022. The FATF has welcomed the significant progress made by these countries, noting that they have established legal and regulatory frameworks to meet their commitments in their respective action plans. The Commission's assessment concludes that Nicaragua, Pakistan, and Zimbabwe no longer have strategic deficiencies in their AML/CFT regimes and have addressed related technical deficiencies to meet their commitments. These countries will continue to work with regional bodies to further improve their AML/CFT systems, including oversight of non-profit organizations in line with FATF standards.
As of today the following countries are identified as high-risk third countries:
- Burkina Faso
- Cayman Islands
- Democratic Republic of the Congo
- South Sudan
- Trinidad and Tobago
- United Arab Emirates
The Commission Delegated Regulation EU) 2023/410 of 19 December 2022 amending Delegated Regulation (EU) 2016/1675 as regards adding the Democratic Republic of the Congo, Gibraltar, Mozambique, Tanzania and the United Arab Emirates to Table I of the Annex to Delegated Regulation (EU) 2016/1675 and deleting Nicaragua, Pakistan and Zimbabwe from that table is available here.
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