Article 31 Identification of third countries posing a specific and serious threat to the Union’s financial system

The Commission is empowered to adopt delegated acts in accordance with Article 85 to supplement this Regulation by identifying 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; where in exceptional cases it considers it indispensable to mitigate a specific and serious threat to the Union’s financial system and the proper functioning of the internal market posed by those 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;, and which cannot be mitigated pursuant to Articles 29 and 30.

1. 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;, in particular:

   1. the criminalisation of 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;;

   2. measures relating to customer due diligence;

   3. requirements relating to record-keeping;

   4. requirements to report suspicious transactions;

   5. the availability of accurate and timely information of the beneficial ownership of legal persons and arrangements to competent authoritiesmeans:a Financial Intelligence Unit (FIU);a supervisory authority;a public authority that has the function of investigating or prosecuting money laundering, its predicate offences or terrorist financing, or that has the function of tracing, seizing or freezing and confiscating criminal assets;a public authority with designated responsibilities for combating money laundering or terrorist financing;;

2. the powers and procedures 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 competent authoritiesmeans:a Financial Intelligence Unit (FIU);a supervisory authority;a public authority that has the function of investigating or prosecuting money laundering, its predicate offences or terrorist financing, or that has the function of tracing, seizing or freezing and confiscating criminal assets;a public authority with designated responsibilities for combating money laundering or terrorist financing; for the purposes of combating 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; including appropriately effective, proportionate and dissuasive sanctions, as well as 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 practice in cooperation and exchange of information with Member States’ competent authoritiesmeans:a Financial Intelligence Unit (FIU);a supervisory authority;a public authority that has the function of investigating or prosecuting money laundering, its predicate offences or terrorist financing, or that has the function of tracing, seizing or freezing and confiscating criminal assets;a public authority with designated responsibilities for combating money laundering or terrorist financing;;

3. 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.

For the purposes of determining the level of threat referred to in paragraph 1, the Commission may request AMLA to adopt an opinion aimed at assessing the specific impact on the integrity of the Union’s financial system due to the level of threat 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;.

Where AMLA identifies that 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; other than those identified pursuant to Articles 29 and 30 poses a specific and serious threat to the Union’s financial system, it may address an opinion to the Commission setting out the threat it has identified and why it believes that the Commission should identify 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; pursuant to paragraph 1.

Where the Commission decides not to identify 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; referred to in the first subparagraph, it shall provide a justification thereof to AMLA.

The Commission, when drawing up the delegated acts referred to in paragraph 1, shall take into account in particular relevant evaluations, assessments or reports drawn up 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;.

Where the identified specific and serious threat from 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; concerned amounts to a significant strategic deficiency, Article 29(4) shall apply and the delegated act referred to in paragraph 1 of this Article shall identify specific countermeasures as referred to in Article 29(5).

Where the identified specific and serious threat from 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; concerned amounts to a compliance weakness, the delegated act referred to in paragraph 1 shall identify specific enhanced due diligence measures among those listed in Article 34(4), that obliged entities shall apply to mitigate risks related to 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 Commission shall review the delegated acts referred to in paragraph 1 on a regular basis to ensure that the countermeasures referred to in paragraph 6 and enhanced due diligence measures referred to in paragraph 7 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.

1. how the criteria referred to in paragraph 2 are assessed;

2. the process for interaction with 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; under assessment;

3. the process for involvement of Member States and AMLA in the identification of 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; posing a specific and serious threat to the Union’s financial system.