Money laundering: high-risk countries

The Money Laundering and Terrorist Financing (Amendment) (High-Risk Countries) Regulations, SI 2021/392 amend the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations, SI 2017/692 to replace references to the European Commission’s list of high-risk third countries with a UK list of high-risk third countries.

Regulation 33 of the principal Regulations requires enhanced due diligence measures to be taken by regulated businesses in respect of business relationships and transactions involving high-risk third countries. Before amendment by the new Regulations, a ‘high-risk third country’ was a country identified in Commission Delegated Regulation (EU) 2016/1675. The Delegated Regulation became retained EU law under the European Union (Withdrawal) Act 2018 on 31 December 2020 but is now revoked by these new Regulations.

The UK list includes the following countries which are not on the EU list: Albania, Burkina Faso, Cayman Islands, Morocco, Senegal.

The following countries are included in the EU list but omitted from the UK list: Afghanistan, The Bahamas, Iraq, Trinidad and Tobago, Vanuatu.

Tackling promoters of tax avoidance

HMRC has published draft technical guidance to set out how the Finance Bill 2021 legislation on strengthened sanctions for those who promote or enable tax avoidance schemes will be applied in practice. The guidance is set out in four sections:

Section A – DOTAS rules (clause 118 and Sch 30);

Section B – promoters of tax avoidance schemes (clause 117 and Sch 29);

Section C – enablers of tax avoidance schemes (clause 119); and

Section D – overview of proposed GAAR changes (clause 120).