Legal background Enhanced due diligence: designation of high-risk countries
The Money Laundering Regulations (MLRs) are a key part of the legislative framework for tackling money laundering and terrorist financing.
	Regulation 33(1)(b) of the MLRs requires regulated businesses ("relevant persons") to apply enhanced customer due diligence measures and enhanced ongoing monitoring in any business relationships with a person established in a high-risk third country, or in relation to any relevant transaction where either of the parties to the transaction is established in a high-risk third country. A high-risk third country is defined for the purposes of the MLRs as a country specified in Schedule 3ZA.
	When Schedule 3ZA is updated and a new country is added or removed to the UK’s list of high-risk third countries, the requirement for enhanced customer due diligence and enhanced ongoing monitoring for businesses and customers operating in or transacting with those countries comes into force with the statutory instrument.
	SAMLA sets out the procedures for updating Schedule 3ZA and the UK’s High-Risk Third Countries list. Section 49(1) notes that statutory instruments are to be laid for enabling or facilitating the detection, prevention or investigation of money laundering or terrorist financing, as well as implementation of Standards published by the FATF from time to time, relating to combating threats to the integrity of the international financial system. Schedule 2 of SAMLA provides further detail to supplement Section 49.
	The Act will make amendments to SAMLA. A statutory instrument will be laid alongside this Act to make corresponding changes to the MLRs (in particular the removal of Schedule 3ZA, which will no longer be necessary).