European Commission Designates Democratic Republic of Congo as High-Risk Country under AML Regulation

The European Commission has identified the Democratic Republic of Congo (DRC) as a high-risk country in its ongoing efforts to combat money laundering and terrorist financing (AML/CFT). Here are the key points:

Reasons for Designation

The DRC’s designation as a high-risk country took effect from March 16, 2023, due to strategic deficiencies in its AML/CFT regimes. The European Commission made this determination in collaboration with the Financial Action Task Force (FATF) and other international partners.

Implications for EU Financial Institutions

Financial institutions, including banks, must exercise increased scrutiny over business relationships and transactions involving high-risk third countries, such as the DRC.

The EU High-Risk List

Besides the DRC, other jurisdictions on the list of high-risk countries include:

Afghanistan
Barbados
Burkina Faso
Cameroon
Gibraltar
Haiti
Iran
Jamaica
Mali
Mozambique
Myanmar
Nigeria
North Korea
Panama
Philippines
Senegal
South Africa
South Sudan
Syria
Tanzania
Trinidad and Tobago
Uganda
United Arab Emirates
Vanuatu
Vietnam
Yemen

EU Listing Process

The EU’s process for identifying high-risk countries follows a staged approach:

Pre-assessment: Determining the countries to be assessed based on their impact on the EU’s financial system, international offshore financial center review, or economic relevance.
Assessment: The European Commission evaluates each country’s AML/CFT framework using a set of criteria.
Listing: If strategic deficiencies are identified, the country is listed as high-risk.
Monitoring: The EU closely monitors the progress made by high-risk jurisdictions in addressing their strategic deficiencies.

Methodology Employed by the European Commission

The methodology employed by the European Commission aims to ensure a transparent and fair process:

Identifying threats to the EU financial system: The focus is on the potential harm high-risk countries’ AML/CFT frameworks could bring to the EU.
Transparency: The process is transparent, with the European Commission publishing its criteria for assessing the risks of a jurisdiction and its assessment report.

International Cooperation

The European Commission maintains relationships with several international organizations to reinforce its efforts in this area, including the FATF, Moneyval, and the Egmont Group.