Here’s a breakdown of Commission Delegated Regulation (EU) 2026/46:
**1. Essence:**
This regulation amends Delegated Regulation (EU) 2016/1675 to include Russia on the EU’s list of high-risk third countries with strategic deficiencies in their anti-money laundering and counter-terrorist financing (AML/CFT) regimes. This means that the EU considers Russia’s AML/CFT framework to have weaknesses that pose a significant threat to the EU’s financial system. The regulation adds a new category to the list to include countries whose FATF membership has been suspended.
**2. Structure and Main Provisions:**
* **Recitals:** The regulation starts with a series of recitals that explain the reasons for the amendment. These recitals highlight the need to protect the EU’s financial system, the importance of the FATF standards, and the specific deficiencies identified in Russia’s AML/CFT regime.
* **Article 1:** This article states that the Annex to Delegated Regulation (EU) 2016/1675 is amended as per the Annex to this regulation.
* **Article 2:** This specifies that the regulation will come into force twenty days after its publication in the Official Journal of the European Union.
* **Annex:** The Annex adds a new category “IV. High-risk third countries which are not identified as being subject to calls for action or increased monitoring by the FATF, but whose membership in that international standard-setter is suspended” and lists the “Russian Federation” under this category.
**Changes Compared to Previous Versions:**
The main change is the addition of Russia to the list of high-risk third countries. This is a new development based on the suspension of Russia’s membership in the FATF and the Commission’s assessment of its AML/CFT deficiencies.
**3. Main Provisions for Practical Use:**
* **Inclusion of Russia as a High-Risk Third Country:** This is the core of the regulation. Businesses and individuals in the EU will need to apply enhanced due diligence measures when dealing with transactions involving Russia.
* **New Category of High-Risk Countries:** The creation of a new category for countries with suspended FATF membership is significant. It signals that the EU is willing to take action against countries that violate the principles of the FATF, even if they are not formally blacklisted by the FATF itself.
* **Impact on Financial Institutions:** EU financial institutions will need to update their AML/CFT procedures to reflect Russia’s new status. This may involve increased scrutiny of transactions, enhanced customer due diligence, and more rigorous reporting requirements.
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This act has direct implications for Ukraine and Ukrainians, as it affects financial transactions and relationships with Russia, which is engaged in a conflict with Ukraine. Ukrainians and businesses dealing with both the EU and Russia should be aware of these enhanced due diligence requirements.
