EU Strengthens Financial Crime Defenses With High-Risk Country Changes

Key Takeaways

• Two New High-Risk Additions: Bolivia and the British Virgin Islands were added to the EU’s list of jurisdictions with strategic AML/CFT deficiencies, triggering enhanced vigilance requirements.
• Six Countries Removed: Burkina Faso, Mali, Mozambique, Nigeria, South Africa, and Tanzania were delisted after making progress aligned with FATF action plans.
• Alignment With Global Standards: The changes reflect decisions made at the June and October 2025 FATF plenaries to maintain consistency with global monitoring efforts.
• Compliance Duties Ahead: The update takes effect after European Parliament and Council scrutiny, meaning European financial institutions must prepare to adjust risk-based due diligence once enacted.

Deep Dive

The European Commission has updated its list of high-risk jurisdictions that pose strategic threats to the integrity of the EU financial system due to shortcomings in anti-money laundering and counter-terrorist financing (AML/CFT) regimes. Bolivia and the British Virgin Islands are the latest to join the list, meaning banks and other EU-regulated entities must apply enhanced vigilance to any dealings connected to those jurisdictions.

The policy shift comes on the heels of recent Financial Action Task Force (FATF) decisions at its June and October 2025 plenaries, where the global watchdog reshuffled its “jurisdictions under increased monitoring” (often referred to as the FATF grey list).

But it’s not all risk alerts and escalations. Six countries (Burkina Faso, Mali, Mozambique, Nigeria, South Africa, and Tanzania) are being removed from the EU’s list after making demonstrable progress against FATF action plans. Their graduation mirrors recent FATF moves, including the recognition of progress by several African nations this autumn—a development we previously reported in FATF Shifts Risk Designations While High-Risk Jurisdictions Hold Steady.

Aligning Closely With FATF

As one of FATF’s founding members, the Commission says its alignment with FATF listings isn’t simply procedural — it’s necessary to uphold the global AML standard-setting framework. European officials continue to monitor remediation efforts within listed jurisdictions and assist them as they work through their action plans.

The update also reflects the EU’s risk-based philosophy, where jurisdictions that meaningfully bolster AML/CFT enforcement can shed their stigma, while those with growing vulnerabilities face heightened scrutiny.

What Financial Institutions Must Prepare For

The regulatory change isn’t effective instantly. Under Article 9 of the fourth Anti-Money Laundering Directive, changes to the EU’s high-risk country list must go through the European Parliament and the Council. The delegated regulation will take effect after a one-month review period, extendable by another month, unless lawmakers raise objections.

Once formalized, financial institutions across the EU will be expected to update due diligence procedures and transaction monitoring controls accordingly.

While this update is narrower in scope than the FATF’s broader risk landscape, progress is rewarded, but vulnerabilities don’t go unnoticed.

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