Is Panama A High Risk Country For Money Laundering

Under the UK's Money Laundering Regulations (regulation 33(1)(b)), enhanced due diligence (EDD) is mandated for any business relationship with a person established in a high-risk third country.

Until the end of the Brexit transition period, the list of high-risk countries was determined by the European Union (EU) under the 4th Anti Money Laundering Directive.

From 1 January 2021, the UK has had its own standalone list. Since then, any amendments to the EU list do not have effect in the UK.

The UK is entitled to amend its own list of high-risk countries under section 49 of the Sanctions and Anti Money Laundering Act 2018 and has announced proposals to align further with Financial Action Task Force (FATF) practices.

The aim remains tackling strategic deficiencies in the identified countries with regards to their national anti-money laundering and counter-financing of terrorism regimes.

You must apply EDD measures in any transaction or business relationship with a person established in a high-risk third country.

For more guidance on appropriate EDD measures, see our guide to customer due diligence and the anti-money laundering guidance for the legal sector.

High-risk third countries

The list of high-risk countries is set out in schedule 3ZA of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.

The list was amended in July 2021 by regulation 2 of the Money Laundering and Terrorist Financing (Amendment) (No 2) (High-Risk Countries) Regulations 2021.

The 24 high-risk third countries are: