The HM Treasuries most recent amendment to the UK MLR, which came into effect on the 9th of March 2022, has brought with it changes to the regulatory obligations which UK firms must seek to implement within their policies and procedures.
Among these changes has been an update to the list of High-risk countries for Money Laundering and Terrorist financing.
The High-risk country lists consolidates the FATF’s guidance of “Jurisdictions under increased monitoring” and “High-risk jurisdictions subject to a call for action” (often referred to as the “grey” and “black” list respectively) into a single consolidated list of high-risk countries that have been identified as having “significant shortcomings in their anti-money laundering counter terrorist financing and counter proliferation financing controls”.
With this update comes the notable addition of the United Arab Emirates, which have so far eluded status as a high-risk third country, placing the jurisdiction alongside members such as the Cayman Islands and Malta.
The UAE’s designation as a high-risk country reflects the FATF’s decision to include the country on their “grey list”, amongst a variety of other jurisdictions subject to increased monitoring as they work to address strategic deficiencies in their measures to counter financial crime.
In contrast, Zimbabwe has had its long-standing status as a high-risk country rescinded for its progress in addressing its AML/CTF deficiencies and removal from the FATF’s grey-list.
For UK firms, this amendment will bring with it the obligation to conduct enhanced due diligence and ongoing monitoring of clients associated with a high-risk country. Likewise, firms must re-assess their existing clients; whose risk status may have been implicated.
