High-risk Countries

23.12.2022

A high-risk country: what is it?

High-risk countriesA high-risk country is a jurisdiction that poses a significant threat to the global financial system due to the fact that it does not sufficiently implement, or does not implement measures to counter money laundering and terrorism financing.

The information in this article applies only to the activities of companies registered and operating in the Czech Republic. At the same time, 90% of the information applies to other EU jurisdictions.

Section 9(1)(a)(3) of Act No. 253/2008 Coll., on Certain Measures against the Legalization of the Proceeds from Crime and the Financing of Terrorism, states that the countries that should be considered high-risk are those that are recognized as such by the European Union regulation or for any other reason.

The normative act which is directly applicable on the territory of the European Union is the Commission Delegated Regulation (EU) 2016/1675 of 14 July 2016 supplementing the Directive (EU) 2015/849 of the European Parliament and Council. It explains how and for what reasons a country may be listed as a high-risk country.

The Financial Analytical Office (FAÚ) also considers important the list of high-risk countries that has been compiled and published by the Financial Action Task Force on Money Laundering (FATF).

High-risk countries: lists

When determining whether a particular country is among the jurisdictions with a high level of risk to the financial system, it is recommended to be guided by the following lists:

FATF lists. This influential intergovernmental organization has created two lists:

  • a blacklist that includes high-risk countries that require a call to action. The countries on this list are characterized by serious AML/CFT deficiencies that pose a direct threat to the international financial system.
  • a grey list that includes countries under enhanced monitoring that actively cooperate with the FATF to quickly eliminate existing shortcomings in the field of AML/CFT.

The list of the European Commission, which in many aspects duplicates the mentioned FATF lists. It is annexed to Regulation (EU) 2016/1675 supplementing Directive (EU) 2015/849.

All these lists are mandatory for individuals and companies that are obliged to comply with the principles listed in the AML/CFT Act. They are encouraged to apply enhanced measures to customers originating from countries included in one of the mentioned lists.

The consolidated list of high-risk countries according to the FATF and the European Commission as of October 21, 2022 is as follows:

  • Afghanistan (AFG) – included in the list of the European Commission
  • Albania (ALB) – included in the FATF list
  • Barbados (BRB) – included in both lists
  • Burkina Faso (BFA) – included in both lists
  • Philippines (PHL) – included in both lists
  • Gibraltar (GIB) – included in the FATF list
  • Haiti (HTI) – included in both lists
  • Iran (IRN) – included in both lists
  • Jamaica (JAM) – included in both lists
  • Yemen (YEM) – included in both lists
  • South Sudan (SSD) – included in both lists
  • Jordan (JOR) – included in both lists
  • Cayman Islands (GYM) – included in both lists
  • Cambodia (KHM) – included in both lists
  • North Korea (PRK) – included in both lists
  • Mali (MLI) – included in both lists
  • Morocco (MAR) – included in both lists
  • Myanmar (MMR) – included in both lists
  • Nicaragua (NIC) – included in both lists
  • Pakistan (PAK) – included in both lists
  • Panama (PAN) – included in both lists
  • Senegal (SEN) – included in both lists
  • United Arab Emirates (ARE) – included in the FATF list
  • Syria (SYR) – included in both lists
  • Trinidad and Tobago (TTO) – included in the list of the European Commission
  • Turkey (TUR) – included in the FATF list
  • Uganda (UGA) – included in both lists
  • Vanuatu (VUT) – included in the list of the European Commission
  • Zimbabwe (ZWE) – included in the list of the European Commission
  • Democratic Republic of the Congo (COD) – included in the FATF list
  • Mozambique (MOZ) – included in the FATF list
  • Tanzania (TZA) – included in the FATF list
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