On Wednesday 13 February, the European Commission adopted a new list of 23 third countries whose anti-money laundering and anti-terrorist financing arrangements are deficient and threaten the European financial system.
So far, 16 countries have been on the list. In 2016, the European Commission published a first list (see EUROPE 11594), which included 11 countries (North Korea, Iran, Afghanistan, Bosnia and Herzegovina, Guyana, Iraq, Laos, Syria, Uganda, Vanuatu, Yemen). It made several changes by adding Ethiopia, then Tunisia, Sri Lanka, Trinidad and Tobago (see EUROPE 11956) and finally Pakistan (see EUROPE 12094).
With the exception of Bosnia and Herzegovina, Guyana, Laos, Uganda and Vanuatu, which have been removed from the new list, the other countries remain on the list. In addition, 12 new countries and territories have joined the Commission, namely the Bahamas and Botswana - which are also on the Financial Action Task Force (FATF) list - but also Saudi Arabia, Panama, Nigeria, Libya, Ghana, Samoa, American Samoa, the United States Virgin Islands, Puerto Rico and Guam, identified using a new Commission assessment method.
At a press conference, the European Commissioner for Justice, Věra Jourová, explained that this is not a system of sanctions. "The message we want to send is that Europe is open to business, but that Europe is not naive and needs to protect its financial system", she explained.
Published in accordance with the provisions of the 4th Anti-Money Laundering Directive (see EUROPE 11220), this list does not prohibit trade with these countries, but requires European banks to carry out additional due diligence checks on financial flows from these countries.
A controversial new method
In order to draw up this list, the Commission has developed its own method, on the basis of information provided by the FATF and other sources such as Europol. This takes into account the stricter criteria set out in the 5th anti-money laundering directive, in particular the availability of information on the companies' beneficial owners.
However, the initiative has raised several reservations among Member States, particularly France, the United Kingdom and Spain. While some are concerned about the impact this decision could have on their economic relations with countries such as Saudi Arabia, others are concerned that the Commission's new method is not really appreciated, according to several sources. This results in a different list from the one drawn up by the FATF, which has so far been taken over by the EU.
"The listing is the result of a robust, objective and technical process", stressed Věra Jourová. The Commission started by identifying 132 relevant countries because of the importance of their transactions with the EU. Then in a second phase, 54 countries were identified as priorities and 23 of them as having shortcomings in their anti-money laundering and anti-terrorist financing regimes - all while consulting Member States on several occasions, the Commissioner said.
Asked about a possible blockage by the Council, Ms Jourová said she did not expect it to achieve a qualified majority for this purpose. For her, the reactions expressed by Member States are usual when something new is proposed, especially when it affects their external relations.
The EU Council and the European Parliament have a period of one month - which may be extended once - to approve or oppose the list, adopted as a delegated regulation.
The list is a "living document", the Commissioner said. Some countries are expected to be withdrawn in the near future, while others have a longer way to go, she said.
Tunisia, for example, is confident that a favourable decision will be taken in the spring. "Our country has fully complied with the measures recommended in the OECD's action plan: amendment of the anti-terrorism law, updating of the national trade register, application of a capital freeze", Tunisian Ambassador to the EU, Ridha Ben Mosbah, told EUROPE.
He indicated that a FATF mission will visit Tunis in April to observe progress towards a decision to withdraw Tunisia in May. (Original version in French by Marion Fontana and Mathieu Bion)