Various changes and amendments have been provided by the Commission proposal regarding the marketing of non-EU AIFs in view of strengthening distribution conditions relating to third countries.

More restrictive conditions for the distribution in member states of AIFs managed by a non-EU AIFM, in particular, non-EU AIFs:

• The third country in which the non-EU AIF or non-EU AIFM is established is not identified as a high-risk third country according to article 9(2) of Directive (EU) 2015/849 (AML Directive IV); and
• The third country in which the non-EU AIF or non-EU AIFM is established is not mentioned in appendix I to the EU Council conclusions of 2020 on the revised EU list of non-cooperative jurisdictions for tax purposes. The Cayman Islands appears in appendix I, preventing the marketing under national private placement regimes of funds established in the Cayman Islands if this wording is retained in the final version of AIFMD II. However, the Cayman Islands are not mentioned in the most recent conclusions of the EU Council dated October 4, 2022. Note that the European Parliament draft report does not update the reference to the conclusions of 2020, which mention the Cayman Islands.

Some countries and territories have been recently added to the EU list of high-risk third countries by the European Commission, such as the Cayman Islands, Jordan, and Morocco.
The impact of references to the lists of high-risk countries for AML/CFT and tax purposes will depend on how the EU deals with the third countries that raise issues in this regard. The process to be followed by an AIFM when a third country is added to such lists should be clarified.

[1] On 4 October 2022, the Council added the Bahamas, Anguilla and Turks and Caicos in their conclusions. The current EU list of non-cooperative jurisdictions for tax purposes is composed of the following: American Samoa, Anguilla, the Bahamas, Fiji, Guam, Palau, Panama, Samoa, Trinidad and Tobago, Turks and Caicos, US Virgin Islands, and Vanuatu. This EU list is due to be revised in February 2023.

You can access a copy of the directive proposed by the European Commission here.