A High-Risk Third Country is a country outside the European Union that has been identified as having strategic deficiencies in its Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) framework. The European Commission maintains and updates a list of such countries, drawing heavily on the assessments of the Financial Action Task Force (FATF) — the international standard-setter for AML/CFT. Countries on this list are typically those with weak customer due diligence regimes, ineffective supervision of the financial sector, or poor international cooperation in financial crime matters.
Under EU law, any business relationship or transaction involving a person or entity from a high-risk third country is automatically subject to mandatory Enhanced Due Diligence (EDD). This means obliged entities must take additional steps to understand the relationship, verify source of funds, and obtain senior management approval. The list is dynamic — countries can be added or removed as their AML/CFT frameworks improve or deteriorate. Financial crime compliance professionals must therefore maintain up-to-date awareness of the current list, as it can change without significant advance notice.
High-Risk Third Country list: https://finance.ec.europa.eu/financial-crime/anti-money-laundering-and-countering-financing-terrorism-international-level_en
