Bribery, money laundering and sanctions in high risk jurisdictions: Have you updated your risk assessments?

Bribery, money laundering and sanctions in high risk jurisdictions: Have you updated your risk assessments?


Author: Ron Reid

The Financial Action Task Force (FATF) - the global standard-setting body for anti-money laundering and combating the financing of terrorism - has issued an updated advisory notice on current high risk jurisdictions.

In it, the FATF has highlighted a number of jurisdictions that it believes pose a risk to the international financial system.

In light of this new guidance, companies who trade with, or whose client's are based in or otherwise connected to these jurisdictions, must now revisit their risk assessments to ensure that the risk of dealing with these countries has been identified, and that adequate procedures and policies - including due diligence - have been put in place.

This should include a revision of risk assessments produced to comply with the Bribery Act legislation.

High risk countries where the FATF recommends enhanced due diligence measures, in accordance with the risks faced, are:

  • Bolivia, Cuba, Democratic People's Republic of Korea*, Ecuador, Ethiopia, Indonesia, Iran*, Kenya, Myanmar, Nigeria, Pakistan, São Tomé and Principe, Sri Lanka, Syria*, Tanzania, Thailand, Turkey, Vietnam, Yemen

The FATF has also identified a further list of countries where appropriate action is recommended in high risk situations:

  • Afghanistan* Albania, Algeria, Angola, Antigua and Barbuda, Argentina, Bangladesh, Brunei Darussalam, Cambodia, Ghana, Kuwait, Kyrgyzstan, Mongolia, Morocco, Namibia, Nepal, Philippines, Sudan*, Tajikistan, Venezuela, Nicaragua and Zimbabwe*

Jurisdictions marked * are subject to international sanctions.

Sanctions are used by the international community to counter terrorism and restrict the activity of unstable regimes. Companies that trade internationally need to be aware that their trading partners could be the subject of sanctions making the trade prohibited or subject to licence requirements. Failure to comply with sanctions is taken very seriously by the regulator, and backed by severe criminal and civil penalties.

Given the number of sanctions regimes that are in place, these often conflict with one another, making compliance very difficult to get right.

Shoosmiths regularly advises companies on their international trading responsibilities, providing advice on the implications of international law on their business.

We also provide practical help on complying with sanctions and obtaining the necessary approvals. In the event of a possible breach, we represent clients throughout the investigation and any subsequent prosecution.