12 May 2008
Statement on equivalence
Member states participating in the EU Committee on the Prevention of Money Laundering and Terrorist Financing have agreed a list of equivalent third countries, for the purposes of the relevant parts of the Third Money Laundering Directive. The list is a voluntary, non-binding measure that nevertheless represents the common understanding of Member States.
In the UK the list is relevant to assessing whether a jurisdiction is equivalent for the purposes of simplified due diligence (Regulation 13, and Schedule 2 Paragraph 3 (b), of the Money Laundering Regulations 2007)1 and reliance (Regulation 17)2.
Common Understanding on Third Country Equivalence
These third countries are currently considered as having equivalent AML/CFT systems to the EU. The list may be reviewed, in particular in the light of public evaluation reports adopted by the FATF, FSRBs, the IMF or the World Bank according to the revised 2003 FATF Recommendations and Methodology.
Argentina
Australia
Brazil
Canada
Hong Kong
Japan
Mexico
New Zealand
The Russian Federation
Singapore
Switzerland
South Africa
The United States
The following text forms a footnote to the Common Understanding.
The list does not apply to Member States of the EU/EEA which benefit de jure from mutual recognition through the implementation of the 3rd AML Directive. The list also includes the French overseas territories (Mayotte, New Caledonia, French Polynesia, Saint Pierre and Miquelon and Wallis and Futuna) and the Dutch overseas territories (Netherlands Antilles and Aruba). Those overseas territories are not member of the EU/EEA but are part of the membership of France and the Kingdom of the Netherlands of the FATF. The UK Crown Dependencies (Jersey, Guernsey, Isle of Man) may also be considered as equivalent by Member States.
The Crown Dependencies and Gibraltar
The Crown Dependencies are considered to be equivalent by the UK.
Gibraltar is also directly subject to the requirements of the Directive, which it has implemented. It is therefore considered to be equivalent for these purposes.
Equivalence in the context of the risk based approach
Firms should note that the list does not override the need for them to continue to operate risk-based procedures when dealing with customers based in an equivalent jurisdiction.
1 Simplified due diligence: The inclusion of a jurisdiction on the list means that a credit or financial institution based there is in a non-EEA state that imposes equivalent requirements to those laid down in the Third Money Laundering Directive. Regulation 13 (2)(b) (i) refers. The test in Regulation (b)(ii) will also need to be satisfied if simplified due diligence is to apply.
2 Reliance. Regulation 17(2)(d) imposes four tests, (i) to (iv), all of which must be satisfied if reliance is to be placed on a non-EEA firm. While the equivalence list was specifically developed with simplified due diligence in mind, the UK accepts that it answers the test in 17(2)(d)(iii).