HMT Advisory Notice – High Risk Third Countries

Posted on |

HM Treasury has issued guidance on risks posed by jurisdictions with unsatisfactory money laundering and terrorist financing controls.

An “HRTC” is defined as “a country named on either of the following lists published by the Financial Action Task Force as they have effect from time to time.

  • High-Risk Jurisdictions subject to a Call for Action
  • Jurisdictions under Increased Monitoring

Key points to note:

  1. Relevant Persons are required to conduct enhanced due diligence and continuous monitoring for all clients, whether new or existing, if they are established in a High-Risk Third Country (HRTC).
  2. It is important for Notaries to ensure there are systems in place for checking both new and existing clients when HRTC list changes occur.
  3. Being established in a country means:
    • in the case of a legal person, being incorporated in or having its principal place of business in that country, or, in the case of a financial institution or a credit institution, having its principal regulatory authority in that country; and
    • in the case of an individual, being resident in that country, but not merely having been born in that country.
  4. Relevant persons should consider the seriousness with which they undertake EDD (i.e., the level of detail, the type of verification) in order to meet their obligations.
  5. UK relevant persons to ensure any of their branches or subsidiaries based in HRTC apply measures equivalent to the enhanced customer due diligence measures.