EU extends money laundering blacklist

Monday 18 February 2019 10:45 CET | News

A new blacklist of non-EU countries alleged to have weak anti-money laundering regimes has been adopted by the European Commission, extending it from 16 to 23 countries.

The 23 jurisdictions are: Afghanistan, American Samoa, the Bahamas, Botswana, North Korea, Ethiopia, Ghana, Guam, Iran, Iraq, Libya, Nigeria, Pakistan, Panama, Puerto Rico, Samoa, Saudi Arabia, Sri Lanka, Syria, Trinidad and Tobago, Tunisia, the US Virgin Islands, and Yemen. Only 12 of these are named by the Financial Action Task Force (FATF) in its corresponding list of countries with strategic money laundering deficiencies.

The list has grown because of stricter criteria imposed by EU’s 5th Anti-Money Laundering Directive, particularly relating to the availability of information on beneficial ownership of companies or other legal entities that may be used to hide the real beneficiaries of a transaction.

The document takes the official form of a Delegated Regulation and needs to be submitted to the European Parliament and Council for approval within one month, with a possible one-month extension. Once approved, the Regulation will be gazetted in the Official Journal of the European Union and enter into force 20 days later. After that, EU financial institutions will have to apply increased due-diligence checks on customers and financial bodies in these high-risk third countries.

However, several US overseas territories are included on the EU list, drawing sharp criticism from Washington, according to the STEP. The EUs process, said Washington, did not include a sufficiently in-depth review; provided listed jurisdictions with only a cursory basis for its determination; gave the listed jurisdictions only a few days’ notice; and did not give them any meaningful opportunity to challenge their inclusion. Moreover, Panama also objected to its inclusion.

Nevertheless, EU justice commissioner said the EU had ‘established the strongest anti-money laundering standards in the world’ and invited the countries listed to remedy their deficiencies swiftly and apply to be removed, as Bosnia-Herzegovina, Guyana, Lao PDR, Uganda and Vanuatu already have been.

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Keywords: European Commission, Europe, money laundering, anti money laundering, 5th AML, fraud prevention, tax evasion
Countries: World