ASK MAT – According to the JFSC, what countries are higher-risk countries?

ASK MAT – According to the JFSC, what countries are higher-risk countries?

MAT SAYS: This is an excellent question, as there is a bit of confusion/complexity.

In the first instance, the JFSC says:-

1. Relevant persons are expected to exercise judgment concerning how they interpret and use all the 14 Sources and should reach and document their considerations and conclusions at their own risk.
2. For additional guidance, please review Sections 3, 6, and 7 of the AML/CFT/CPF Handbook.

The JFSC then says that HIGHER RISK JURISDICTIONS [SINGULARLY HIGHER] have been defined as those in Appendix D2 of the AML/CFT/CPF Handbook that are ANY ONE of the following:-

• Source 1 – FATF BLACKLIST - https://www.fatf-gafi.org/en/publications/High-risk-and-other-monitored-jurisdictions/Call-for-action-february-2025.html
• Source 2 – FATF GREY LIST - https://www.fatf-gafi.org/en/publications/High-risk-and-other-monitored-jurisdictions/increased-monitoring-february-2025.html
• Sources 6 - JERSEY-named country or territory linked to a designation - https://www.jerseyfsc.org/industry/international-co-operation/sanctions/sanctions-by-country-and-category/
• Source 12 – SANCTION - Arms embargo, trade sanctions and other trade restrictions - https://www.gov.uk/guidance/current-arms-embargoes-and-other-restrictions#arms-embargo-trade-sanctions-and-other-trade-restrictions
• Source 14 - terrorist financing - Government of Jersey list - https://www.gov.je/Industry/Finance/FinancialCrime/pages/moneylaunderingterroristfinancing.aspx#anchor-1

In addition, any one of the above or any other collection of sources will also be higher where there is:-

• 3 or more [CUMULATIVELY HIGHER >3]

The JFSC, then, in its Appendix 2 guide, breaks down the 14 sources as follows and can highlight the SINGULARLY HIGHER vis-à-vis CUMULATIVELY HIGHER countries

1. 1. The Higher Risk/Money Laundering list (Column B) is based on Sources
      1. 1 and 2, [SINGULARLY HIGHER]
      2. 3, 4, 7, 8, 9, 10, and 11.[CUMULATIVELY HIGHER >3]
   2. The Higher Risk/Financing of Terrorism list (Column C) is based on Sources
      1. 1, 2, and 14 [SINGULARLY HIGHER]
      2. 3, 4, 5, 10, 13,.[CUMULATIVELY HIGHER >3]
   3. The Higher Risk/Financial Sanctions list (Column D) is based on Source
      1. 6 [SINGULARLY HIGHER]
   4. The Higher Risk/Financing of Proliferation of Weapons of Mass Destruction list (Column E) is based on Sources
      1. 1 and 12.[SINGULARLY HIGHER]

And taking the sources from C, D and or E, any cumulative result of 3 or more

1. 3, 4, 5, 10,  7, 8, 9, 10, 11 13

Finally, do not forget your risk appetite in any country.

JFSC REFERENCE

• www.jerseyfsc.org/industry/financial-crime/amlcftcpf-handbooks/appendix-d2-countries-and-territories-identified-as-presenting-higher-risks/

Plus

www.jerseyfsc.org/industry/risk/supervisory-risk-data-collection-exercise/sector-based-aggregated-data/#Sector-based-aggregated-data

PLUS

https://www.jerseyfsc.org/media/7709/hb-sections-1-18.pdf