bank asks if we trade with countries on a risk list, what should I answer

Countries on the sanctions or risk list: what the bank wants to see

The bank asks this as part of client due diligence, and the answer consists of two parts: do you have business relations in the mentioned countries, and if so, with whom exactly. A simple "no" is sufficient if that is actually the case and you can substantiate it from your own records — for example, an overview of customers and suppliers by country. If there is a relation with a high-risk country, the bank usually asks further questions about the nature of the transactions, the counterparty and sometimes the final destination of goods or services. The latter is more difficult to automate than a simple yes/no question, and the system therefore provides no suggestion: without supporting documentation in your file, it does not propose an answer.

Note the difference with the question about a sanctions list: that concerns whether the company itself, or a director or stakeholder, appears on such a list — you answer that via the declaration intended for that purpose. The question about high-risk countries is about you, about where you conduct business, not about who is in charge of your company. These two are often placed on the same page in bank questionnaires, while legally they are really different questions. The question about the source of funds is also often asked in the same section — that is a separate question with its own answer, not a second way of asking about country risk.

Basis: the bank's client due diligence

This question stems from the client due diligence that banks must carry out under the Anti-Money Laundering and Counter-Terrorist Financing Act. Part of that due diligence specifically focuses on countries with elevated risk of money laundering or terrorist financing; if a customer has business relations in such countries, the bank must investigate that more closely than with an ordinary relation. That is why the question in the questionnaire is often accompanied by a request for further explanation as soon as the answer is "yes".