On 7th of May, 2020 the EU Commission has implemented a new delegated Regulation (EU) 2020/855 which supplements the Directive (EU) 2015/849 by adding additional countries to the EU high third country list, which highly affects EU banks, electronic money institutions in Lithuania/EU and licensed payment institutions in Lithuania/EU as there are additional control measures to be applied to cooperate with the high risk third countries.
The new EU high risk third country list includes: Afghanistan, The Bahamas, Barbados, Botswana, Cambodia, Ghana, Iraq, Jamaica, Mauritius, Mongolia, Myanmar/Burma, Nicaragua, Pakistan, Panama, Syria, Trinidad and Tobago, Uganda, Vanuatu, Yemen, Zimbabwe’. The countries in the EU high risk third country list are being listed as high risk third countries which have provided a written high-level political commitment to address the identified deficiencies and have developed an action plan with FATF. It is notable, that the new EU regulation will enter into force on 1st of October, 2020, hence the payment institutions will have to implement measures against the afore mentioned jurisdictions.
As the main goal of the EU high risk third country list is to prevent the use of EU’s financial system for the purpose of money laundering and terrorist financing, the payment institutions in Lithuania located within the EU, will have to carry out certain measures in order to strictly evaluate all clients from the EU high risk third country jurisdictions, and payment institutions in Lithuania are generally requested not to cooperate with clients from the EU high risk third country list – unless enhanced customer due diligence is carried out.
EU high risk third countries list generally sets out the EU’s stance on the money laundering issues that entail the cooperation with high risk third countries, hence all payment institutions in Lithuania/EU and other businesses in Lithuania/EU that fall into the applicable AML part must strictly observe and abide the EU high risk third country list in order to prevent significant fines and regulatory measures against them.
It is advisable that all payment institutions in Lithuania follow the EU high risk third country lists on daily bases, as the information tends to be updated over time – some high risk third countries are removed from the EU high risk third country list, but some are added. For example, With the Regulation 2020/855, six countries were removed from the EU high risk third country list (within the Commission Delegated Regulation (EU) 2016/1675) – Bosnia-Herzegovina, Guyana, Lao PDR, Ethiopia, Sri Lanka and Tunisia.
It is a notable fact, that the EU high risk third country list, has now been updated by the total of twenty high risk third countries, previously there were only nine. Currently, in the EU high risk third country list there is only one country which is high risk third country which presents ongoing and substantial money-laundering and terrorist financing risks, having repeatedly failed to address the identified deficiencies and which are identified by FATF Public Statement – the Democratic People’s Republic of Korea (DPRK).
To find out additional information regarding the EU high risk third countries as well as other anti-money laundering matters in Lithuania/EU, do not hesitate to contact our anti-money laundering lawyers in Lithuania/EU to find out more information – firstname.lastname@example.org, +371 67 24 00 90.