EU Imposes Anti-Money Laundering Regulations on High-Risk Countries, Including Afghanistan

The European Union has taken steps to identify high-risk countries with strategic deficiencies in their anti-money laundering (AML) and counter-terrorism financing (CFT) regimes. The latest list of high-risk third countries includes Afghanistan, which was added to the list in 2016.

Identifying High-Risk Countries

The Commission is actively working with international partners, including the Financial Action Task Force (FATF), a global standard setter on AML/CFT, to identify jurisdictions having strategic deficiencies in their regimes. The FATF identifies countries that have failed to address these shortcomings and provides recommendations for improvement.

Protecting the EU’s Financial System

To protect the EU’s financial system and internal market, the Commission is empowered to identify high-risk third countries with strategic deficiencies in their AML/CFT frameworks. This reduces the risks posed by these jurisdictions to the Union’s financial system.

Increased Checks and Controls

Under the 5th Anti-Money Laundering Directive, gatekeepers such as banks are obliged to conduct increased checks and control measures on business relationships and transactions involving high-risk third countries.

The List of High-Risk Countries

The list includes 32 jurisdictions that have failed to address strategic deficiencies in their AML/CFT regimes, posing significant threats to the EU’s financial system. Afghanistan was listed in 2016 and has since been subject to increased scrutiny by the Commission.

Listing Process

The listing process follows a staged approach, including pre-assessment, assessment, listing, and monitoring of progress. The Commission developed a methodology in 2020 to ensure a fair and transparent process for identifying high-risk countries based on faults in their national AML/CFT regimes.

Purpose of the Regulations

The EU’s anti-money laundering regulations are designed to:

Protect the integrity of its financial system and internal market
Reinforce internal security
Promote sustainable development

Monitoring Progress

The Commission will continue to monitor the progress of listed countries and assess additional jurisdictions as necessary. The EU’s anti-money laundering regulations aim to combat the global circulation of dirty money and promote a safer financial environment for all.

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