Financial Crime World

AML Regulations 2022: Vanuatu Added to High-Risk Jurisdiction List

The European Union has taken a decisive step to combat money laundering and terrorism financing by adding several countries, including Vanuatu, to its list of high-risk jurisdictions. This move aims to protect the integrity of the EU’s financial system and internal market.

Background

On December 12, 2023, the EU Commission adopted a new Delegated Regulation that amends an earlier regulation from 2016. The updated list includes 24 countries with strategic deficiencies in their anti-money laundering and counter-terrorism financing regimes.

Countries on the List

The list of high-risk jurisdictions includes:

  • Afghanistan
  • Democratic Republic of Congo
  • Iran
  • North Korea
  • South Africa
  • United Arab Emirates
  • Vanuatu

Assessment Process

The EU’s listing process involves a four-stage approach:

  1. Pre-assessment: Each country is evaluated against international standards set by organizations like the Financial Action Task Force (FATF).
  2. Assessment: The Commission assesses each country’s AML/CFT regime against these international standards.
  3. Listing: Countries are listed as high-risk jurisdictions if they meet certain criteria, including being identified as having a systemic impact on the EU financial system or being reviewed by international organizations like the International Monetary Fund.
  4. Monitoring: The Commission monitors the progress of each country to ensure compliance with AML/CFT standards.

Methodology

The methodology used to identify high-risk jurisdictions is based on a 2020 report that outlines measures for identifying countries with significant threats to the EU’s financial system. Countries are considered relevant if they meet certain criteria, including:

  • Being identified as having a systemic impact on the integrity of the EU financial system
  • Being reviewed by international organizations like the International Monetary Fund

Global Concerns

The EU’s move comes amid growing concerns over global money laundering and terrorist financing activities. The Commission has emphasized the importance of working with international partners to combat these threats and protect the integrity of the EU’s financial system.

  • The EU is a member of several other international bodies dedicated to combating money laundering, including:
    • Financial Action Task Force (FATF)
    • Moneyval
    • Egmont Group