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Reminder: High-risk countries for money laundering purposes: Enhanced Due Diligence

Regulation 33(1)(b) of the 2017 Money Laundering Regulations requires any relevant person (i.e. an IP) to apply enhanced due diligence (EDD) measures where there is “… any business relationship… with a person established in a high-risk third country or in relation to any relevant transaction where either of the parties to the transaction is established in a high-risk third country“.

If you wish to check if any business relationship – or more likely a relevant transaction – is with a party in a high-risk third country, HM Treasury publish a list of countries deemed to be a high-risk. On 14 November 2022, HM Treasury published the ‘Money Laundering and Terrorist Financing (High-Risk Countries) Amendment (No.3) Regulations 2022. A copy can be found here. The list of countries can also be found in Schedule 3ZA of the 2017 Money Laundering Regulations and this will show that Gibraltar has recently been added to the list of high-risk third countries.

Members should continue to be aware of the risks of money laundering to their business from overseas criminals and parties, ensure that overseas matters are flagged as high-risk matters on your Reg 18 Firm Risk Assessment and ensure that staff are aware that if they have any overseas issues, to ensure that these are flagged, so initial checks can be made to confirm whether and what EDD is required.