This document contains a general overview of the Simplified Due Diligence (SDD) provision of the EU Third Directive (Directive 2005/60/EC of the European Parliament and of the Council of 26 October 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing) and the UK Money Laundering Regulations 2007. It is designed to aid the development of a white list for carrying out SDD. EU Third Directive allows relevant persons to rely on simplified due diligence in case their customers are based in equivalent jurisdiction for Anti-Money Laundering (AML) purposes. Furthermore, in pursuant to the provision of simplified due diligence, the EU member states have drawn up a list of third countries which are deemed to have equivalent AML regimes. The latest list was published in June 2012 and is periodically reviewed.

1. C6 Whitepaper
For public distribution Date: 20 July 2012
Simplified Due Diligence
© C6 Intelligence Information Systems Limited, 2012
NO PART OF THIS PUBLICATION MAY BE REPRODUCED, OR TRANSMITTED WITHOUT
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2. Contents
Contents ................................................................................................................................... 2
1. Simplified Due Diligence - Background .......................................................................... 4
2. Money Laundering Regulation 2007.............................................................................. 5
3. Equivalent Jurisdiction Threat and Vulnerability Assessment ........................................ 8
Australia........................................................................................................................... 8
Austria ............................................................................................................................ 8
Belgium ............................................................................................................................ 8
Brazil ............................................................................................................................ 8
Bulgaria ............................................................................................................................ 9
Canada ............................................................................................................................ 9
Cyprus ............................................................................................................................ 9
Czech Republic ................................................................................................................. 9
Denmark ........................................................................................................................ 10
Estonia .......................................................................................................................... 10
Finland .......................................................................................................................... 10
France .......................................................................................................................... 10
Germany ........................................................................................................................ 10
Greece .......................................................................................................................... 11
Hong Kong ..................................................................................................................... 11
Hungary ......................................................................................................................... 11
Iceland .......................................................................................................................... 11
India .......................................................................................................................... 12
Ireland .......................................................................................................................... 12
Italy .......................................................................................................................... 12
Japan .......................................................................................................................... 12
Latvia .......................................................................................................................... 12
Liechtenstein ................................................................................................................. 13
Lithuania ........................................................................................................................ 13
Luxembourg ................................................................................................................... 13
Malta .......................................................................................................................... 13
Mexico .......................................................................................................................... 13
Netherlands ................................................................................................................... 14
Norway .......................................................................................................................... 14
Poland .......................................................................................................................... 14
Portugal ......................................................................................................................... 14
Romania......................................................................................................................... 15
Singapore ....................................................................................................................... 15
Slovakia .......................................................................................................................... 15
Slovenia ......................................................................................................................... 15
South Africa ................................................................................................................... 15
South Korea ................................................................................................................... 16

3. Spain .......................................................................................................................... 16
Sweden .......................................................................................................................... 16
Switzerland .................................................................................................................... 17
Turkey .......................................................................................................................... 17
United Kingdom ............................................................................................................. 17
United States of America ............................................................................................... 18
4. Sources ....................................................................................................................... 19

4. 1. Simplified Due Diligence -
Background
This document contains a general overview of the Simplified Due Diligence (SDD) provision of
the EU Third Directive (Directive 2005/60/EC of the European Parliament and of the Council of
26 October 2005 on the prevention of the use of the financial system for the purpose of
money laundering and terrorist financing) and the UK Money Laundering Regulations 2007. It
is designed to aid the development of a white list for carrying out SDD. The information
contained in the document does not constitute legal advice and assistance should be sought
from qualified legal professional if specific area mentioned in the document is likely to affect
any aspect of your operations.
EU Third Directive allows relevant persons to rely on simplified due diligence in case their
customers are based in equivalent jurisdiction for Anti-Money Laundering (AML) purposes.
Furthermore, in pursuant to the provision of simplified due diligence, the EU member states
have drawn up a list of third countries which are deemed to have equivalent AML regimes.
The latest list was published in June 2012 and is periodically reviewed.

5. 2. Money Laundering Regulation 2007
The simplified due diligence provision of 3rd EU Directive has also been implemented in the
UK by means of the domestic legal instrument viz., Section 13 of the Money Laundering
Regulation, 2007.
S 13 (1) states that a relevant person is not required to apply customer due diligence (CDD)
measures…if he has reasonable ground to believe that the customer or the product falls in the
below defined categories:
A. The customer is
1. a credit or financial institution subjected to the money laundering directive;
2. a credit or financial institution or equivalent institution which is situated outside the EEA
state that imposes legal requirements which are equivalent to those laid down in the money
laundering directive and where the compliance is closely supervised;
3. a company whose securities are listed on a regulated market subject to specified
disclosure obligation;
4. an independent legal professional and the product in question is an account into which
monies are pooled, provided that where the pooled account is held outside the EEA state, the
state imposes legal requirements to counter money laundering and terrorist financing which
are consistent to international standards and the independent legal profession is closely
supervised for compliance with those requirements and upon request, the information about
the identity of the persons on whose behalf monies are held in the pooled account is available
to the institution which acts as a depository institution for the account;
5. a public authority in the United Kingdom
6. a public authority which fulfils all the conditions set out in paragraph 2 of Schedule 2 of
the regulation stated below;
(a) the authority has been entrusted with public functions pursuant to the Treaty on the
European Union, the Treaties on the European Communities or Community secondary
legislation;
(b) the authority’s identity is publicly available, transparent and certain;
(c) the activities of the authority and its accounting practices are transparent;
(d) either the authority is accountable to a Community institution or to the authorities of an
EEA state, or otherwise appropriate check and balance procedures exist ensuring control of
the authority’s activity.
B. The product is

6. 1. a life insurance contract where the annual premium is less or equal to 1,000 euro or where
a single premium of no more than 2,500 euro is paid;
2. an insurance contract for the purposes of a pension scheme where the contract contains no
surrender clause and cannot be used as collateral;
3. a pension, superannuation or similar scheme which provides retirement benefits to
employees, where contributions are made by an employer or by way of deduction from an
employee’s wages and the scheme rules do not permit the assignment of a member’s
interest under the scheme (other than an assignment permitted by section 44 of the Welfare
Reform and Pensions Act 1999) (disapplication of restrictions on alienation) or section 91(5)(a)
of the Pensions Act 1995) (inalienability of occupational pension)); or
4. electronic money, within the meaning of Article 1(3)(b) of the electronic money directive,
where—
(a) if the device cannot be recharged, the maximum amount stored in the device is no more
than 150 euro; or
(b) if the device can be recharged, a limit of 2,500 euro is imposed on the total amount
transacted in a calendar year, except when an amount of 1,000 euro or more is redeemed in
the same calendar year by the bearer (within the meaning of Article 3 of the electronic money
directive).
5. The product and any transaction related to such product fulfils all the conditions set out in
paragraph 3 of Schedule 2 to these Regulations as stated below.
(a) the product has a written contractual base;
(b) any related transaction is carried out through an account of the customer with a credit
institution which is subject to the money laundering directive or with a credit institution
situated in a non-EEA state which imposes requirements equivalent to those laid down in that
directive;
(c) the product or related transaction is not anonymous and its nature is such that it allows for
the timely application of customer due diligence measures where there is a suspicion of
money laundering or terrorist financing;
(d) the product is within the following maximum threshold—
(i) in the case of insurance policies or savings products of a similar nature, the annual premium
is no more than 1,000 euro or there is a single premium of no more than 2,500 euro;
(ii) in the case of products which are related to the financing of physical assets where the legal
and beneficial title of the assets is not transferred to the customer until the termination of the
contractual relationship (whether the transaction is carried out in a single operation or in
several operations which appear to be linked), the annual payments do not exceed 15,000
euro;
(iii) in all other cases, the maximum threshold is 15,000 euro;

7. (e) the benefits of the product or related transaction cannot be realised for the benefit of third
parties, except in the case of death, disablement, survival to a predetermined advanced age,
or similar events;
(f) in the case of products or related transactions allowing for the investment of funds in
financial assets or claims, including insurance or other kinds of contingent claims—
(i) the benefits of the product or related transaction are only realisable in the long term;
(ii) the product or related transaction cannot be used as collateral; and
(iii) during the contractual relationship, no accelerated payments are made, surrender clauses
used or early termination takes place.
6. The product is a child trust fund within the meaning given by section 1(2) of the Child Trust
Funds Act 2004.
The SDD provision however does not absolve a relevant person from conducting CDD where
he suspects money laundering or terrorist financing as required under S 7 (c) of the regulation
or where a risk-sensitive approach in relation to customers, products or locations dictates that
full CDD should be carried out.

8. 3. Equivalent Jurisdiction Threat and
Vulnerability Assessment
The section below lists the countries included in the equivalent jurisdiction by the European
member states. Summary of threat from criminal activities and vulnerability to money
laundering risk is also presented. The information thus provided is based on the FATF Mutual
Evaluation Reports (MER) and the US State Department Money Laundering.
Australia
Member of FATF
FATF Mutual Evaluation 2005 mentions the country is non-compliant with the CDD provision.
The country is a regional financial centre and fraud-related and narcotics offenses provide a
substantial source of crime proceeds.
Austria
Member of FATF and the EU
FATF MER 2009 mentions the country is only partially compliant with the CDD provision. The
country is a major regional financial centre. Both banking system and non-bank financial
institutions and businesses are vulnerable to the risk of money laundering. Illegal funds are
primarily derived from crimes such as serious fraud, smuggling, corruption, narcotics and
human trafficking.
Belgium
Member of FATF and the EU
FATF MER 2005 mentions the country is largely Compliant with the CDD provision. However,
the country is prone to laundering of criminal funds derived from serious forms of financial
crime, including tax crime, and drug trafficking by means of remittance transactions and shell
companies. The funds are primarily handled by non-financial sectors, in particular lawyers, real
estate entities and non-profit organizations. In 2010, the authorities have identified the use of
“money mules” for laundering money. Internet scams as well as fraud committed through the
European carbon market have also been identified as the sources of illegal funds. The Belgian
diamond industry is also vulnerable to money laundering.
Brazil
Member of FATF
FATF MER 2010 mentions the country is only partially compliant with the CDD provision. The
country is a regional financial centre for Latin America. Brazil is both the destination and
transit country for drug traffickers. Therefore, it is vulnerable to money laundering involving
drugs money. Corruption, organized crime, gambling and illegal trade in contrabands are other

9. major threats. Funds are channelled through the banking sector, real estate investment, high
value goods, financial assets, and remittances networks. Sao Paulo, Rio de Janeiro, Mato
Grosso do Sul, Parana and the Tri-Border Area (TBA) of Brazil, Argentina, and Paraguay are
particularly considered to be vulnerable to money laundering. Weapons, narcotics, and a wide
variety of counterfeit goods, including CDs, DVDs, and computer software (much of it of Asian
origin), are mainly smuggled across the border from Paraguay into Brazil.
Bulgaria
Member of the EU
FATF MER 2008 mentions the country is only partially compliant with the CDD provision. A
combination of lack of effective enforcement of AML regulation and the developing financial
sector, large underground economy, prevalent use of cash transactions make the country
vulnerable to money laundering. The major sources of illegal funds are derived mostly from
domestic and foreign criminals involved in drug trafficking, smuggling, human trafficking, tax
fraud, credit card fraud, and internet fraud. The country is a major transit point into Western
Europe for the trafficking of drugs and persons. Corruption also remains a serious threat.
Criminal elements mostly establish small cash-based businesses such as casinos and gaming,
night clubs along with car dealerships, tourism and wholesale traders are commonly
associated with money laundering in the country. Contrabands such as cigarettes, alcohol, and
fuel are also smuggled in the country.
Canada
Member of FATF
FATF MER 2008 mentions the country is only partially compliant with the CDD provision,
Money laundering activities in Canada are primarily results from illegal narcotics, psychotropic
substances, or chemical smuggling. The country is also identified as a leading supplier of
ecstasy (to the US) and methamphetamine internationally. Cigarette smuggling related and
trade-based money laundering also occurs in the country.
Cyprus
Member of the EU
FATF MER 2006 mentions the country is only partially compliant with the CDD provision. The
country is a major regional financial centre with a strong financial services industry attracting
large amount of non-resident businesses partly due to its preferential tax regime and double
tax treaties with 44 countries (including the United States, several European Union (EU)
nations, and former Soviet Union nations). Consequently the country faces risks from money
laundering and illicit finance activities. The biggest threats for money laundering are primarily
from simple financial crime domestically and tax evasion internationally.
Czech Republic
Member of the EU
FATF MER 2008 mentions the country is only partially compliant with the CDD provision.
Furthermore, the country’s central location in Europe and open market economy increase its

10. vulnerability to money laundering. Major source of illegal funds come from fraud and tax
evasion. Both domestic and overseas criminal group, mainly from the former Soviet republics,
the Balkans and Asia target country’s banks, investment companies, real estate agencies,
currency exchange offices, casinos, and other gaming establishments for laundering money.
The country is also vulnerable to cigarettes smuggling and other tobacco products, as well as
pirated products from Asia, including CDs, DVDs, and counterfeit designer goods.
Denmark
Member of FATF and the EU
FATF MER 2006 mentions the country is only partially compliant with the CDD provision.
Denmark is vulnerable from foreign criminal activity and is primarily related to the sale of
illegal narcotics, specifically cocaine, heroin and amphetamines. Furthermore, the country is
geographically serves as a transit country for smuggling into Sweden and Norway.
Estonia
Member of the EU
FATF MER 2008 mentions the country is largely compliant with the CDD provision and the
country has one of the most developed banking systems in the Eastern Europe. Transnational
and organized crime groups are attracted to the territory due to its location between Eastern
and Western Europe.
Finland
Member of FATF and the EU
FATF MER 2007 mentions the country is only partially compliant with the CDD provision.
Money Laundering threat comes from illegal proceeds generated financial crimes. These funds
are laundered through currency exchangers and gambling establishments.
France
Member of FATF and the EU
FATF MER 2011 mentions the country is largely compliant with the CDD provision. Narcotics
and human trafficking, smuggling, and other crimes associated with organized crime are the
major threat. The following jurisdictions are French Overseas Territories and therefore are
considered to be equivalent jurisdiction: French Polynesia, Mayotte, New Caledonia, Saint
Pierre and Miquelon and Wallis and Futuna.
Germany
Member of FATF and the EU
FATF MER 2010 mentions the country is only partially compliant with the CDD provision.
Germany is one of the largest financial centres in Europe. The country is a consumer and a
major transit hub for narcotics. Consequently, organized criminal groups involved in drug

11. trafficking and other illegal activities are constant threat to the financial system. In particular,
electronic payment systems; financial agents, i.e., persons who are solicited to make their
private accounts available for money laundering transactions; and trade in CO2 emission
certificates are vulnerable.
Greece
Member of FATF and the EU
FATF MER 2007 mentions the country is only partially compliant with the CDD provision. The
country is a regional financial centre in the developing Balkans. It also serves as a bridge
between Europe and the Middle East. Corruption, organized crime, and a large shadow
economy make the country vulnerable to money laundering and terrorist financing. Other
threats include drugs trafficking, trafficking in persons and illegal immigration, prostitution,
smuggling of cigarettes and other contraband, serious fraud or theft, illicit gaming activities,
and large scale tax evasion. Illegal funds are invested in real estate, the lottery, and the stock
market.
Hong Kong
Member of FATF
FATF MER 2008 mentions the country is only partially compliant with the CDD provision. It is a
major international financial and trading centre. Due to the nature of simplified tax regime
and sophisticated banking system the country is vulnerable to the risk of money laundering.
The major sources of illegal funds are illegal gambling, fraud, financial crimes, loan sharking,
and goods smuggling activities.
Hungary
Member of the EU
FATF MER 2005 mentions the country is largely compliant with the CDD provision.
Nevertheless, the country is attractive to international criminal organizations because of its
strategic location which links the former Soviet Union and Western Europe and due to its
cash-based economy co-existing with a well-developed financial services sector
Iceland
Member of FATF and the European Economic Area (EEA)
FATF MER 2006 mentions the country is only partially compliant with the CDD provision. The
country is vulnerable to money laundering due to narcotics smuggling and trading but is not
considered a major problem. Criminal proceeds tend to derive from domestic organizations
with some linkages to foreign groups.

12. India
Member of FATF
FATF MER 2010 mentions the country is partially compliant with the CDD provision. India’s
informal economy and remittance systems along with uncontrolled borders, corruption, and
onerous tax administration and currency controls make it vulnerable to economic crimes
(including fraud, cybercrime, and identity theft), money laundering, and terrorist financing.
Laundered funds are derived from corruption narcotics trafficking and trafficking in persons,
transnational organized crime, and illegal trade. Criminal networks exchange high-quality
counterfeit currency for genuine notes, which facilitates money laundering.
Ireland
Member of FATF and the EU
FATF MER 2006 mentions the country is partially compliant with the CDD provision. The
country is considered to be an offshore financial centre. The primary sources of funds
laundered in the country are prostitution, cigarette smuggling, drug trafficking, fuel laundering,
domestic tax violations and welfare fraud. While money laundering occurs via credit
institutions such as banks, money has also been laundered through schemes involving
remittance companies, solicitors, accountants, and second-hand car dealerships.
Italy
Member of FATF and the EU
FATF MER 2005 mentions the country is only partially compliant with the CDD provision. It also
is a major European transit country for illegal narcotics. Corruption, illegal immigration, human
trafficking are other threats to the financial sector of the country.
Japan
Member of FATF
FATF MER 2008 mentions the country is non-compliant with the CDD provision. It faces
substantial risk of money laundering from organized crime groups, extremist religious groups
etc. The major sources of money laundering proceeds include drug trafficking, fraud, loan-
sharking, remittance frauds, the black market economy, prostitution, and illicit gambling. In
the past year, there has been an increase in financial crimes by citizens of West African
countries, such as Nigeria and Ghana, who are resident in Japan.
Latvia
Member of the EU
FATF MER 2006 mentions the country is only partially compliant with the CDD provision. Drugs
trafficking, corruption and contraband smuggling is the primary source of illegal funds in the
country.

13. Liechtenstein
Member of the European Economic Area (EEA)
FATF MER 2007 mentions the country is only partially compliant with the CDD provision. The
Principality of Liechtenstein has a well-developed offshore financial services sector, liberal
incorporation and corporate governance rules, relatively low tax rates, and a tradition of strict
bank secrecy. All of these conditions significantly contribute to the ability of financial
intermediaries in Liechtenstein to attract both licit and illicit funds from abroad.
Lithuania
Member of the EU
FATF MER 2006 mentions the country is only partially compliant with the CDD provision. The
sale of narcotics does not generate a significant portion of money laundering activity in
Lithuania. Value added tax (VAT) fraud is one of the biggest sources of illicit income, through
underreporting of goods’ value. Most financial crimes, including VAT embezzlement,
smuggling, illegal production and sale of alcohol, capital flight, and profit concealment, are
tied to tax evasion by Lithuanians.
Luxembourg
Member of FATF and the EU
FATF MER 2010 mentions the country is only partially compliant with the CDD provision. It is a
recognised offshore financial centre. While Luxembourg is not a major hub for illicit narcotics
distribution, the size and sophistication of its financial sector create opportunities for money
laundering, tax evasion, and other financial crimes.
Malta
Member of the EU
FATF MER 2007 mentions the country is largely compliant with the CDD provision. However,
its location between Italy and North Africa makes it vulnerable to money laundering involving
funds originating from narcotics, human trafficking, fraud, embezzlement and forgery
Mexico
Member of FATF
FATF MER 2008 mentions the country is only partially compliant with the CDD provision. The
country also is a major narcotics producing and transiting country. Other sources of illegal
funds are corruption, kidnapping, and trafficking in firearms and persons.

14. Netherlands
Member of FATF and the EU
FATF MER 2011 mentions the country is partially compliant with the CDD provision. The
Netherlands is a major financial centre and consequently an attractive venue for laundering
funds generated from illicit activities, including activities often related to the sale of cocaine,
cannabis, or synthetic and designer drugs, such as ecstasy. Financial fraud, especially tax-
evasion, is believed to generate a considerable portion of domestic money laundering.
The following jurisdictions have membership of the Kingdom of Netherlands and are therefore
considered to be equivalent jurisdiction: Aruba, Bonaire, Curacao, Saba, Sint Eustatius and Sint
Maarten
Norway
Member of FATF and the European Economic Area (EEA)
FATF MER 2005 mentions the country is partially compliant with the CDD provision. However
is considered to be a low money laundering risk jurisdiction.
Poland
Member of the EU
FATF MER 2007 mentions the country is non-compliant with the CDD provision. Poland lies
directly along one of the main routes used by narcotics traffickers and organized crime groups
between the former Soviet Union republics and Western Europe. According to Polish
government estimates, narcotics trafficking, organized crime activity, auto theft (declining),
smuggling, extortion, counterfeiting, burglary, and other crimes generate criminal proceeds in
the range of less than $2 billion each year.
Portugal
Member of FATF and the EU
FATF MER 2008 mentions the country is largely compliant with the CDD provision. The country
is an entry point for narcotics transiting into Europe. The majority of money laundered in
Portugal is narcotics-related. Its long coastline, vast territorial waters and privileged
relationships with countries in Latin America and Africa make it a gateway country for Latin
American cocaine and a trans-shipment point for drugs coming from West Africa entering
Europe. Criminal funds can also originate from smuggled commodities, particularly tobacco
products. Additionally, criminal proceeds can be derived from corruption, traffic in works of
art and cultural artifacts, extortion, embezzlement, tax offenses, and facilitating illegal
immigration. Currency exchanges and real estate purchases are often used for laundering
criminal proceeds.

15. Romania
Member of the EU
FATF MER 2008 mentions the country is only partially compliant with the CDD provision. The
country is not a regional financial centre but the country’s geographical location makes it a
natural transit country for trafficking in narcotics, stolen vehicles, persons and arms by
transnational organized criminal elements. As a result, Romania is vulnerable to financial
activities associated with such crimes, including money laundering. Tax fraud, fraudulent
claims in consumer lending, and trans-border smuggling of counterfeit goods are additional
types of financial crimes common in the country.
Singapore
Member of FATF
FATF MER 2008 mentions the country is largely compliant with the CDD provision. The country
is a major international financial and investment centre as well as a major offshore financial
centre. Secrecy protections and a lack of routine large currency reporting requirements, and
the size and growth of Singapore’s private banking and assets management sector pose
significant money laundering (ML) risks. The jurisdiction is potentially attractive as a money
laundering/terrorist financing destination for drug traffickers, transnational criminals, foreign
corrupt officials, terrorist organizations and their supporters.
Slovakia
Member of the EU
FATF MER 2006 mentions the country is only partially compliant with the CDD provision. The
country is a transit and destination country for counterfeit and smuggled goods, stolen autos,
value-added tax (VAT) fraud, and trafficking in persons, weapons and illegal drugs. Criminal
activity is characterized by a high level of domestic and foreign organized crime, mainly from
eastern and south-eastern Europe. A number of the same groups are also involved in
laundering funds raised from these criminal activities. Trade-based money laundering and
possible terrorist financing also occur in Slovakia.
Slovenia
Member of the EU
FATF MER 2006 mentions the country is largely compliant with the CDD provision. The country
is not a major narcotics producer, but is a transit country for drugs moving via the Balkans to
Western Europe.
South Africa
Member of FATF
FATF MER 2009 mentions the country is only partially compliant with the CDD provision. South
Africa’s position as the major financial centre in the region, its sophisticated banking and

16. financial sector, and its large, cash-based market make it vulnerable to exploitation by
transnational and domestic crime syndicates. The largest source of laundered funds in the
country is proceeds from the narcotics trade. Fraud, theft, racketeering, corruption, currency
speculation, credit card skimming, poaching, theft of precious metals and minerals, human
trafficking, stolen cars, and smuggling are also sources of laundered funds. Many criminal
organizations are also involved in legitimate business operations. There is a significant black
market for smuggled and stolen goods. In addition to criminal activity by South African
nationals, observers note criminal activity by Nigerian, Pakistani, Andean and Indian drug
traffickers, Chinese triads, Taiwanese groups, Bulgarian credit card skimmers, Lebanese
trading syndicates, and the Russian mafia
South Korea
Member of FATF
FATF MER 2009 mentions the country is only partially compliant with the CDD provision. While
most money laundering in South Korea is associated with domestic criminal activity and
official corruption, locally-based criminal groups associate with international crime syndicates
involved in human trafficking, contraband smuggling, and related organized crime. Korean
money launderers use illegal game rooms, customs and trade fraud, intellectual property theft,
and counterfeit goods to conceal proceeds. They also exploit the zero value added tax (VAT)
rates on gold bars. Launderers frequently use cash transactions or fraudulent bank accounts to
conceal proceeds from illicit activities.
Spain
Member of FATF and the EU
FATF MER 2006 mentions the country is only partially compliant. The country is a major
European centre of money laundering activities as well as an important gateway for illicit
narcotics entering Europe. Drug proceeds from other regions enter the country as well,
particularly proceeds from hashish from Morocco and cocaine from Latin America. Passengers
traveling from Spain to Latin America reportedly smuggle sizeable sums of bulk cash. Informal
money transfer services facilitate cash transfers between Latin America, particularly Colombia,
and Spain. An unknown percentage of drug trafficking proceeds are invested in Spanish real
estate, particularly in the once-booming coastal areas in the south and east of the country.
Criminal groups also place money in other sectors, including services, communications,
automobiles, art work, and the financial sector.
Sweden
Member of FATF and the EU
FATF MER 2006 mentions the country is only partially compliant with the CDD provision. While
the country is not a regional financial centre, money laundering occurs either through
individuals who use the financial system to turn over illicit funds, or with the help of
corporations that use financial system services. Money laundering is further facilitated by
criminals having contacts or acquaintances within, or influence over corporations and actors
within the financial system. Laundered money originates from narcotics, tax fraud, economic
crimes, robbery, and organized crime.

17. Switzerland
Member of FATF and the European Economic Area (EEA)
FATF MER 2005 mentions the country is only partially compliant with the CDD provision. The
country is a major international financial centre. Criminals attempt to launder illegal proceeds
in the country from a wide range of criminal activities conducted worldwide. These illegal
activities include, but are not limited to, financial crimes, narcotics trafficking, arms trafficking,
organized crime, terrorist financing and corruption. Although both Swiss and foreign
individuals or entities launder money in Switzerland, foreign narcotics trafficking organizations,
often based in Russia, the Balkans, Eastern Europe, South America and West Africa, dominate
the narcotics-related money laundering operations in Switzerland.
Turkey
Member of FATF
Turkey features in FATF High Risk and Non-cooperative Jurisdictions in June 2012. FATF further
maintains that if Turkey does not take significant actions by October 2012, it will call upon its
members to apply countermeasures proportionate to the risks associated with the country. In
June 2011, FATF had added Turkey to its list of “Jurisdictions with strategic AML/CFT
deficiencies that have not made sufficient progress in addressing the deficiencies.” FATF MER
2007 mentions the country is non-compliant with the CDD provisions. The country is an
important regional financial centre, particularly for Central Asia and the Caucasus, as well as
for the Middle East and Eastern Europe. It continues to be a major transit route for Southwest
Asian opiates moving to Europe. In addition to drugs related money, other significant sources
of criminal fund include invoice fraud and tax evasion, and to a lesser extent, smuggling,
counterfeit goods, and forgery. Terrorist financing and terrorist organizations with suspected
involvement in narcotics trafficking and other illicit activities are also present in Turkey.
Money laundering takes place in banks, non-bank financial institutions, and the underground
economy. Money laundering methods in Turkey include: the large-scale cross-border
smuggling of currency; bank transfers into and out of the country; trade fraud; and the
purchase of high-value items such as real estate, gold, and luxury automobiles. Turkish-based
traffickers transfer money and sometimes gold via couriers, the underground banking system,
and bank transfers to pay narcotics suppliers in Pakistan or Afghanistan. Funds are often
transferred to accounts in the United Arab Emirates, Pakistan, and other Middle Eastern
countries.
United Kingdom
Member of FATF and the EU
FATF MER 2007 mentions the country is only partially compliant with the CDD provision. The
country is a major financial centre not only in Europe but internationally and remains
attractive to money launderers. In addition to narcotics, financial fraud and the smuggling of
people and goods, have become increasingly important sources of illegal proceeds. There also
has been an increase in credit/debit card fraud, use of the internet for fraud, and the purchase
of high-value assets to disguise illegally obtained money. The MER indicates that the overall
threat to the country from serious organized crime and related money laundering was high.

18. There has also been an increase in the movement of cash via the non-bank financial system.
The use of bureau de change, cash smugglers (into and out of the UK), and traditional
gatekeepers (including solicitors and accountants) to move and launder criminal proceeds has
also been rising
Unlike France and the Netherlands, the following UK dependencies are not automatically
considered equivalent jurisdiction. The UK Crown dependencies may or may not be treated as
an equivalent jurisdictions: Guernsey, Isle of Man and Jersey
United States of America
Member of FATF
FATF MER 2008 mentions the country is only partially compliant with the CDD provision. The
country is a source, transit, and destination country for human trafficking, debt bondage,
document servitude, and sex trafficking. FATF MER 2008 mentions the country is partially
compliant with the CDD provision. The United States is a source, transit, and destination
country for men, women, and children subjected to forced labour, debt bondage, document
servitude, and sex trafficking. Trafficking occurs for commercial sexual exploitation in street
prostitution, massage parlours, and brothels, and for labour in domestic service, agriculture,
manufacturing, janitorial services, hotel services, hospitality industries, construction, health
and elder care, and strip club dancing.

19. 4. Sources
Source ID nº: 1 Date retrieved July 2012 Annex nº -
(if source document annexed)
Source Name Official Journal of the European Union (Eur-Lex Europa.eu)
URL: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2005:309:0015:0036:en:PDF
Description: Directive 2005/60/EC of the European Parliament and of the Council of 26 October 2005 on the
prevention of the use of the financial system for the purpose of money laundering and terrorist financing
Source ID nº: 2 Date retrieved July 2012 Annex nº -
(if source document annexed)
Source Name Legislation.gov.uk
URL: http://www.legislation.gov.uk/uksi/2007/2157/contents/made
Description: The text of the UK Money Laundering Regulations (2007)
Source ID nº: 3 Date retrieved July 2012 Annex nº -
(if source document annexed)
Source Name Financial Action Task Force
URL: http://www.fatf-gafi.org/
Description: Mutual Evaluation reports of individual countries.
Source ID nº: 4 Date retrieved July 2012 Annex nº -
(if source document annexed)
Source Name US Department of State
URL: http://www.state.gov/j/inl/rls/nrcrpt/2012/vol2/index.htm
Description: International Narcotics Control Strategy Report, Volume II: Money Laundering and Financial Crimes.

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