The European Commission has included Saudi Arabia and Panama in an extended ‘blacklist’ of uncooperative jurisdictions in the fight against money laundering and terrorist financing, in an effort to regain citizens’ trust in the combat against financial crimes.
“In Europe, scandal after scandal, many people have become disillusioned about the rules. That the rich and the cheaters play a different more privileged game. We say no more. It was high time for Europe to act,” the Commissioner for justice, Věra Jourová, told reporters on Wednesday (13 February).
The new list includes 23 countries, compared with 16 in the existing one.
The Commission listed 12 countries already considered as risky jurisdictions for the Financial Action Task Force, an inter-governmental body specialized in financial crimes.
Besides, the EU executive added 11 jurisdictions, including Saudi Arabia, Panama or the US Virgin Islands.
The Commissioner explained that her services used stricter criteria, in particular in regard to the transparency of the real owners of companies and trusts (beneficial ownership structures).
But the new methodology, and the inclusion of the Saudis, was contested by large member states like the UK, France, Germany, Italy or Spain.
However, Jourová did not expect that there would be a qualified majority in the Council (16 member states representing 65% of the population) to reject the list.
“I am surprised by some of the reactions, but I do believe that some of the member states expressed full understanding of why we are doing it,” she told reporters.
The Commissioner explained that the list is not a sanction system, but a warning mechanism to offer guidance to banks and other financial players to look more closely and with “enhanced due diligence” when they operate with actors from these jurisdictions.
The Commission published last June a new methodology. It looked at how countries criminalised anti-money laundering activities and terrorism financing, the existence of additional checks, the powers of competent authorities to apply sanctions if rules were breached, and the transparency about the beneficial ownership.
The criteria were applied to 54 jurisdictions, where the EU executive assessed the risks and the existing legislation.
The ‘blacklist’ published on Wednesday includes Afghanistan, American Samoa, The Bahamas, Botswana, Guam, North Korea, Ethiopia, Ghana, Iran, Iraq, Libya, Nigeria, Panama, Pakistan, Puerto Rico, Samoa, Saudi Arabia, Sri Lanka, Syria, Trinidad and Tobago, Tunisia, US Virgin Islands and Yemen.
‘An extra mile’
Jourová highlighted the importance of the EU’s stricter requirements to see who are the real beneficiaries of companies and trusts.
She said that, once again, Europe advanced “an extra mile” to act as a “lighthouse” for those who want to have the best rules in this field.
The Czech Commissioner said the blacklist is a “living document”, and countries could come clean if they improve their legislation in order to fulfil the European standards.
“Europe cannot be a laundromat for dirty money that sponsors crime and terrorism,” Jourova insisted.
“The times when we were too naive about this are over, both inside the EU and internationally,” she added.
The list adds to the EU’s ongoing efforts to fight money launderers. On Thursday, the co-legislators will start discussing a proposal to give the European Banking Authority additional powers to look into suspicious activities in national entities.
The new compilation was welcomed by some of the most active members in the European Parliament in the fight against ‘dirty money’.
“In the face of the enormous amounts of lobbying we’ve seen from certain countries included on the list and also from EU member states, it’s good to see that the Commission has held its nerve and is taking this the fight against money laundering seriously,” said Green MEP Sven Giegold.
Some organisations recommended that the Commission should push for more transparency among Europe’s partners.
“The EU led the world when it agreed new rules requiring full transparency of the real owners behind EU companies last year, but it has lost its nerve in pressuring others to do the same,” said Nienke Palstra, a senior anti-corruption campaigner at Global Witness, an international NGO that fights for human rights and against corruption.
[Edited by Zoran Radosavljevic]