Amechi Ogbonna with agency report
Following its intensive research on illicit financial flows across the world, the European Commission yesterday said it has now added Saudi Arabia, Panama, Nigeria and 20 other jurisdictions to a blacklist of nations seen as posing a threat to dirty money transactions due to lax controls on terrorism financing and money laundering.
The European Union executive said on Wednesday, that the move was part of a crackdown on money laundering after several scandals at EU banks. This is coming as several EU countries including Britain have expressed concern over their economic relations with some of the listed states, notably Saudi Arabia, and Nigeria, one of its former colony
The Saudi government media office did not immediately respond to a request for comment. Panama said it should be removed from the list because it recently adopted stronger rules against money laundering.
Despite pressure to exclude Riyadh from the list, the Commission decided to list the Kingdom.
Apart from on the reputational damage on the affected nations, inclusion on the list complicates financial relations with the EU. The bloc’s banks will have to carry out additional checks on payments involving entities from listed jurisdictions.
The list now has 23 jurisdictions, up from 16, as the EU Commission said it added jurisdictions with “strategic deficiencies in their anti-money laundering and counter terrorist financing regimes”.
Other newcomers to the list include Libya, Botswana, Ghana, Samoa, the Bahamas and the four United States territories of American Samoa, U.S. Virgin Islands, Puerto Rico and Guam.
Also listed are Afghanistan, North Korea, Ethiopia, Iran, Iraq, Pakistan, Sri Lanka, Syria, Trinidad and Tobago, Tunisia and Yemen.
Meanwhile, the Commission has removed Bosnia, Guyana, Laos, Uganda and Vanuatu from the list.
The 28 EU member states now have one month, which can be extended to two, to endorse the list. They could reject it by qualified majority. EU Justice Commissioner, Vera Jourova, who proposed the list, told a news conference that she was confident states would not block it.
She said it was urgent to act because “risks spread like wildfire in the banking sector.”
But concerns remain. Britain, which plans to leave the EU on March 29, said on Wednesday the list could “confuse businesses” because it diverges from a smaller listing compiled by its Financial Action Task Force (FATF), which is the global standard-setter for anti-money laundering.
The FATF list includes 12 jurisdictions – all on the EU blacklist – but excludes Saudi Arabia, Panama and U.S. territories. The FATF will update its list next week.
London has led a pushback against the EU list in past days, and at closed-door meetings urged the exclusion of Saudi Arabia, EU sources told Reuters.
The oil-rich kingdom is a major importer of goods and weapons from the EU, just as several top British banks have operations there. Royal Bank of Scotland is the European bank with the largest turnover in Saudi Arabia, with around 150 million euros ($169.28 million) in 2015, according to public data.
HSBC is Europe’s most successful bank in Riyadh. It booked profits of 450 million euros in 2015 in the kingdom but disclosed no turnover and has no employees there, according to public data released under EU rules.
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