Article 29 Identification of third countries with significant strategic deficiencies in their national AML/CFT regimes

Third countriesmeans any jurisdiction, independent state or autonomous territory that is not part of the Union and that has its own AML/CFT legislation or enforcement regime; with significant strategic deficiencies in their national AML/CFT regimes shall be identified by the Commission and designated as ‘high-risk third countriesmeans any jurisdiction, independent state or autonomous territory that is not part of the Union and that has its own AML/CFT legislation or enforcement regime;’.

1. significant strategic deficiencies in the legal and institutional AML/CFT framework of the third countrymeans any jurisdiction, independent state or autonomous territory that is not part of the Union and that has its own AML/CFT legislation or enforcement regime; have been identified;

2. significant strategic deficiencies in the effectiveness of the third countrymeans any jurisdiction, independent state or autonomous territory that is not part of the Union and that has its own AML/CFT legislation or enforcement regime;’s AML/CFT system in addressing money launderingmeans the conduct set out in Article 3, paragraphs 1 and 5, of Directive (EU) 2018/1673 including aiding and abetting, inciting and attempting to commit that conduct, whether the activities which generated the property to be laundered were carried out on the territory of a Member State or on that of a third country; knowledge, intent or purpose required as an element of that conduct may be inferred from objective factual circumstances; and terrorist financingmeans the conduct set out in Article 11 of Directive (EU) 2017/541 including aiding and abetting, inciting and attempting to commit that conduct, whether carried out on the territory of a Member State or on that of a third country; knowledge, intent or purpose required as an element of that conduct may be inferred from objective factual circumstances; risks or in its system to assess and mitigate risks of non-implementation or evasion of UN financial sanctions relating to proliferation financingmeans both asset freezing and prohibitions to make funds or other assets available, directly or indirectly, for the benefit of designated or listed persons and entities pursuant to:UNSC Resolution 1718 (2006) and any successor resolutions;UNSC Resolution 2231 (2015) and any successor resolutions;any other UNSC resolutions imposing asset freezing and prohibitions to make funds or other assets available in relation to the financing of proliferation of weapons of mass destruction; have been identified;

3. the significant strategic deficiencies identified under points (a) and (b) are of a persistent nature and no measures to mitigate them have been taken or are being taken.

For the purposes of paragraph 2, the Commission shall take into account calls for the application of enhanced due diligence measures and additional mitigating measures (‘countermeasures’) by international organisations and standard setters with competence in the field of preventing money launderingmeans the conduct set out in Article 3, paragraphs 1 and 5, of Directive (EU) 2018/1673 including aiding and abetting, inciting and attempting to commit that conduct, whether the activities which generated the property to be laundered were carried out on the territory of a Member State or on that of a third country; knowledge, intent or purpose required as an element of that conduct may be inferred from objective factual circumstances; and combating terrorist financingmeans the conduct set out in Article 11 of Directive (EU) 2017/541 including aiding and abetting, inciting and attempting to commit that conduct, whether carried out on the territory of a Member State or on that of a third country; knowledge, intent or purpose required as an element of that conduct may be inferred from objective factual circumstances;, as well as relevant evaluations, assessments, reports or public statements drawn up by them.

Where a third countrymeans any jurisdiction, independent state or autonomous territory that is not part of the Union and that has its own AML/CFT legislation or enforcement regime; is identified in accordance with the criteria referred to in paragraph 2, obliged entities shall apply enhanced due diligence measures listed in Article 34(4) with respect to the business relationshipsmeans a business, professional or commercial relationship connected with the professional activities of an obliged entity, which is set up between an obliged entity and a customer, including in the absence of a written contract and which is expected to have, at the time when the contact is established, or which subsequently acquires, an element of repetition or duration; or occasional transactions involving natural or legal persons from that third countrymeans any jurisdiction, independent state or autonomous territory that is not part of the Union and that has its own AML/CFT legislation or enforcement regime;.

The delegated act referred to in paragraph 2 shall identify among the countermeasures listed in Article 35 the specific countermeasures mitigating specific risks stemming from each high-risk third countrymeans any jurisdiction, independent state or autonomous territory that is not part of the Union and that has its own AML/CFT legislation or enforcement regime;.

Where a Member State identifies a specific money launderingmeans the conduct set out in Article 3, paragraphs 1 and 5, of Directive (EU) 2018/1673 including aiding and abetting, inciting and attempting to commit that conduct, whether the activities which generated the property to be laundered were carried out on the territory of a Member State or on that of a third country; knowledge, intent or purpose required as an element of that conduct may be inferred from objective factual circumstances; or terrorist financingmeans the conduct set out in Article 11 of Directive (EU) 2017/541 including aiding and abetting, inciting and attempting to commit that conduct, whether carried out on the territory of a Member State or on that of a third country; knowledge, intent or purpose required as an element of that conduct may be inferred from objective factual circumstances; risk posed by a third countrymeans any jurisdiction, independent state or autonomous territory that is not part of the Union and that has its own AML/CFT legislation or enforcement regime; that the Commission has identified in accordance with the criteria referred to in paragraph 2 which is not addressed by the countermeasures referred to in paragraph 5, it may require obliged entities established in its territory to apply specific additional countermeasures to mitigate the specific risks stemming from that third countrymeans any jurisdiction, independent state or autonomous territory that is not part of the Union and that has its own AML/CFT legislation or enforcement regime;. The risk identified and the corresponding countermeasures shall be notified to the Commission within 5 days of the countermeasures being applied.

The Commission shall review the delegated acts referred to in paragraph 2 on a regular basis to ensure that the specific countermeasures identified pursuant to paragraph 5 take account of the changes in the AML/CFT framework of the third countrymeans any jurisdiction, independent state or autonomous territory that is not part of the Union and that has its own AML/CFT legislation or enforcement regime; and are proportionate and adequate to the risks.

Upon receiving a notification pursuant to paragraph 6, the Commission shall assess the information received to determine whether country-specific risks affect the integrity of the Union’s internal market. Where appropriate, the Commission shall review the delegated acts referred to in paragraph 2, by adding the necessary countermeasures to mitigate those additional risks. Where the Commission considers that the specific additional measures applied by a Member State under paragraph 6 are not necessary to mitigate specific risks stemming from that third countrymeans any jurisdiction, independent state or autonomous territory that is not part of the Union and that has its own AML/CFT legislation or enforcement regime;, it may decide, by means of an implementing act, that the Member State shall put an end to the specific additional countermeasure.