EU Demands Increased Due Diligence in Transactions with High-risk Countries

The European Union has warned regulators and industry bodies that companies and individuals should perform with an increased level of due diligence when conducting financial transactions with high-risk countries.

The warning follows the update by the European Commission (EC) of the terms of reference for the High Risk Third Country Directive in December 2022. The Directive defines high-risk third countries with strategic deficiencies in the area of ​​combating money laundering (AML) and the financing of terrorism (CFT).

The gambling business, along with banking and insurance, is recognized as a high-risk sector, which requires the respective companies to be particularly vigilant in relation to high-risk transactions involving third countries.

In 2022, the G7 financial watchdog, the Financial Action Task Force on Money Laundering (FATF), added Gibraltar to the gray list of jurisdictions requiring enhanced financial controls.

Gibraltar serves as the hub of operations for the online gambling sector, with 45 licenses operating and 2,000 employees as of May 2022.

On the monitoring list, the EU recognizes the FATF assessment as the basis for its methodology for assessing high-risk countries. However, the EC says it will conduct a separate country assessment that takes into account eight key areas of financial crime.

Member State regulators and industry associations confirm the need for businesses and individuals to be vigilant in preventing money laundering and other fraudulent activities that may originate from high-risk third countries.

Don’t forget to subscribe to our Telegram-channel!