A list of red-flagged countries with poor controls on money laundering and fraud has been highlighted by Government.

Attorney General Mark Pettingill said the list of “serious deficiencies” included totalitarian North Korea, and Iran, which the international Financial Action Task Force (FATF) had singled out for “continued failure to adequately address ongoing and substantial deficiencies in their anti-money laundering and combating the financing of terrorism regimes”.

And a statement warned financial centres to take particular care when dealing with companies or financial institutions from either country.

The statement added: “The FATF remains particularly and exceptionally concerned with Iran’s failure to address the risk of terrorism financing and the serious threat this poses to the international financial system.

“The FATF therefore reaffirmed its call to its members to apply countermeasures against each jurisdiction.”

FATF also listed 11 other nations which had failed to demonstrate “satisfactory and sufficient” progress to combat money-laundering and terrorism financing.

These were Algeria, Ecuador, Ethiopia, Indonesia, Kenya, Myanmar, Pakistan, Syria, Tanzania, Turkey and Yemen.

The FATF report said: “The FATF calls on its members to consider the risks arising from the deficiencies associated with each jurisdiction.”

Among countries listed as working with FATF — but still requiring more work to cut down on the risk of dirty money — are Cuba, Argentina, Nicaragua, Vietnam, Antigua and Barbuda and Kuwait.