Home Europe European Commission Commission Delegated Regulation (EU) 2024/163 of 12 December...
Date: 18-Jan-2024 Category: Not Applicable State: Union Government Country: Europe

Commission Delegated Regulation (EU) 2024/163 of 12 December 2023 amending Delegated Regulation (EU) 2016/1675 as regards the deletion of the Cayman Islands and Jordan from the table in point I of the Annex

Issued by European Commission · Directorate-General for Financial Stability

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Executive Summary & Key Takeaways

What it means

  • Commission Delegated Regulation (EU) 2024/163 amends Delegated Regulation (EU) 2016/1675 to remove the Cayman Islands and Jordan from the list of high-risk third countries with strategic deficiencies in their Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) regimes.

Key Changes

  • The Cayman Islands and Jordan are removed from the list of high-risk third countries identified in Delegated Regulation (EU) 2016/1675.
  • This decision is based on the Financial Action Task Force (FATF) removing the Cayman Islands and Jordan from its list of ‘Jurisdictions under Increased Monitoring’ in October 2023.
  • The Commission assessed that both countries have made significant progress in improving their AML/CFT regimes and have addressed the strategic deficiencies identified by the FATF.
  • The updated list of high-risk third countries is provided in the Annex to the regulation.
  • The regulation enters into force on the twentieth day following its publication in the Official Journal of the European Union.

Impact Analysis

Financial Institutions

  • There may be a reduction in compliance costs associated with transactions involving these jurisdictions.

Businesses operating in the EU

  • Legal and compliance teams should be informed of the regulatory update to ensure alignment with current requirements.

Cayman Islands and Jordan

  • The Cayman Islands and Jordan must continue to strengthen their AML/CFT regimes to maintain compliance with international standards.

EU Regulators

  • Continued monitoring of the AML/CFT regimes in the Cayman Islands and Jordan is necessary to ensure ongoing compliance.

Key Entities Referenced

European Commission: The executive branch of the European Union, responsible for proposing and implementing legislation. Financial Action Task Force (FATF): An inter-governmental body that sets international standards to combat money laundering and terrorist financing. European Parliament: The directly elected parliamentary body of the European Union with legislative, supervisory, and budgetary responsibilities. Council of the European Union: A body representing the governments of the EU member states. Directive (EU) 2015/849: Directive on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing. Commission Delegated Regulation (EU) 2016/1675: Regulation supplementing Directive (EU) 2015/849 by identifying high-risk third countries with strategic deficiencies. Commission Delegated Regulation (EU) 2024/163: Regulation amending Delegated Regulation (EU) 2016/1675 as regards the deletion of the Cayman Islands and Jordan from the list of high-risk third countries.
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Official Journal EN of the European Union L series 2024/163 18.1.2024 COMMISSION DELEGATED REGULATION (EU) 2024/163 of 12 December 2023 amending Delegated Regulation (EU) 2016/1675 as regards the deletion of the Cayman Islands and Jordan from the table in point I of the Annex (Text with EEA relevance) THE EUROPEAN COMMISSION, Having regard to the Treaty on the Functioning of the European Union, Having regard to Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC(1), and in particular Article 9(2) thereof, Whereas: (1) The Union has to ensure the effective protection of the integrity and proper functioning of its financial system and the internal market from money laundering and terrorist financing. Directive (EU) 2015/849 therefore provides that the Commission is to identify third-country jurisdictions which have strategic deficiencies in their regimes on anti-money laundering and countering financing of terrorism (‘AML/CFT’) that pose significant threats to the financial system of the Union (‘high-risk third countries’). (2) Commission Delegated Regulation (EU) 2016/1675(2)identifies high-risk third countries with strategic deficiencies. (3) Considering the high level of integration of the international financial system, the close connection of market operators, the high volume of cross-border transactions to and from the Union, as well as the degree of market openness, any AML/CFT threat posed to the international financial system is also a threat to the financial system of the Union. (4) In accordance with Article 9(4) of Directive (EU) 2015/849, the Commission takes into account recent available information, in particular the recent Financial Action Task Force (FATF) public statements, the FATF list of ‘Jurisdictions under Increased Monitoring’, and FATF reports of the International Cooperation Review Group in relation to the risks posed by individual third countries. (5) Since the latest amendments to Delegated Regulation (EU) 2016/1675, the FATF has updated its list of ‘Jurisdictions under Increased Monitoring’. At its plenary meeting in October 2023, the FATF deleted the Cayman Islands and Jordan from that list. Given those changes, the Commission has conducted an assessment to identify high-risk third countries in accordance with Article 9 of Directive (EU) 2015/849. (6) The Commission has reviewed the progress of the Cayman Islands and Jordan in addressing their strategic deficiencies. Those countries are identified as high-risk third countries in Delegated Regulation (EU) 2016/1675 but were deleted from the FATF list of ‘Jurisdictions under Increased Monitoring’ in October 2023. (7) The FATF has welcomed the significant progress made by the Cayman Islands and Jordan in improving their AML/CFT regimes and has noted that those countries have established legal and regulatory frameworks to meet the commitments in their respective action plans on the strategic deficiencies identified by the FATF. The Cayman Islands and Jordan are therefore no longer subject to the FATF’s monitoring process under its ongoing global AML/CFT compliance process and will continue to work with their FATF-style regional bodies to further strengthen their AML/CFT regimes. (1) OJ L 141, 5.6.2015, p. 73, ELI: http://data.europa.eu/eli/dir/2015/849/oj. (2) Commission Delegated Regulation (EU) 2016/1675 of 14 July 2016 supplementing Directive (EU) 2015/849 of the European Parliament and of the Council by identifying high-risk third countries with strategic deficiencies (OJ L 254, 20.9.2016, p. 1, ELI: http://data.europa.eu/eli/reg_del/2016/1675/oj). ELI: http://data.europa.eu/eli/reg_del/2024/163/oj 1/3EN OJ L, 18.1.2024 (8) The Cayman Islands and Jordan have strengthened the effectiveness of their AML/CFT regimes and addressed technical deficiencies to meet the commitments in their action plans on the strategic deficiencies identified by the FATF. The Commission’s assessment of the available information leads it to conclude that the Cayman Islands and Jordan no longer have strategic deficiencies in their AML/CFT regimes. It is therefore appropriate to delete the Cayman Islands and Jordan from the table in point I of the Annex to Delegated Regulation (EU) 2016/1675. (9) Delegated Regulation (EU) 2016/1675 should therefore be amended accordingly, HAS ADOPTED THIS REGULATION: Article 1 In the Annex to Delegated Regulation (EU) 2016/1675, in point I, the table is replaced by the table in the Annex to this Regulation. Article 2 This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union. This Regulation shall be binding in its entirety and directly applicable in all Member States. Done at Brussels, 12 December 2023. For the Commission The President Ursula VON DER LEYEN 2/3 ELI: http://data.europa.eu/eli/reg_del/2024/163/ojEN OJ L, 18.1.2024 ANNEX ‘No High-risk third country(1) 1 Afghanistan 2 Barbados 3 Burkina Faso 4 Cameroon 5 Democratic Republic of the Congo 6 Gibraltar 7 Haiti 8 Jamaica 9 Mali 10 Mozambique 11 Myanmar 12 Nigeria 13 Panama 14 Philippines 15 Senegal 16 South Africa 17 South Sudan 18 Syria 19 Tanzania 20 Trinidad and Tobago 21 Uganda 22 United Arab Emirates 23 Vanuatu 24 Vietnam 25 Yemen (1) Without prejudice to the legal position of the Kingdom of Spain with regard to sovereignty and jurisdiction in relation to the territory of Gibraltar.’ ELI: http://data.europa.eu/eli/reg_del/2024/163/oj 3/3

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