Overly lengthy procedure, missing "grey" list, and lack of transparency: MEPs from the European Parliament's Economic and Monetary Affairs (ECON) and Civil Liberties (LIBE) committees told the Commission at a virtual meeting on Wednesday 15 April that they had concerns about the new methodology it would soon present for its EU 'blacklist' of high-risk for money laundering third countries.
The Commission intends to maintain its step-by-step approach, which aims at first consulting the countries identified as "priority" countries on the basis of the preliminary results of its assessment, then developing country-specific "EU benchmarks" and finally asking them to commit to specific remedial measures within 12 months before blacklisting them.
The methodology should this time satisfy all the EU institutions and avoid a further rejection of the list by the EU Council like in 2019 (see EUROPE 12209/12) or by the European Parliament as on several occasions in 2016 and 2017 (see EUROPE 11790/5), said Martin Merlin of the Commission's Financial Stability Directorate-General to MEPs.
However, at the meeting, several MEPs, such as Sophie in 't Veld (Renew Europe, Netherlands) and Paul Tang (S&D, Netherlands), expressed disappointment with the Commission's approach and strongly criticised the slowness of the procedure.
Several cases are planned for, Mr Merlin noted, including the possibility of immediately listing a country if there is a "higher level of threat", if the third country is uncooperative and refuses to make commitments, if it does not implement remedial measures within the agreed timeframe, or through an emergency procedure.
"I understand that for some 12 months is a bit too long, for other 12 months is considered as not enough, notably if we talk to some Member States representatives", he said.
Another flaw in the methodology, according to MEPs, is the lack of a 'grey' list of third countries that are potentially high-risk but which have committed to meeting "the EU's benchmarks".
This means that no information will be public for 12 months, until the Commission has finalised its assessment, even though a country has been identified as having deficiencies in money laundering, was the worry expressed by MEP Sven Giegold (Greens/EFA, Germany).
In written replies to MEPs' comments (see EUROPE 12441/16), sent the same day and consulted by EUROPE, the Commission replied that such a list "could expose the Commission to legal risks and impair an ongoing decision making process". The anti-money laundering directive mentions only one list, not two, Martin Merlin explained.
No new 'blacklist' before the end of the year
The European Commission intends to adopt its new methodology at the beginning of May - probably on 6 May, if the special circumstances relating to Covid-19 allow - as well as a delegated act amending the current list to bring it into line with the new Financial Action Task Force (FATF) list.
However, a new list based on the new methodology will have to wait until the end of the year, Mr Merlin said.
Asked about the Commission's ability to resist diplomatic pressure, he assured that this was above all a highly technical process.
Russia had been identified as a priority country in 2018, but at the time there was insufficient information available, he explained, assuring listeners that once the revised methodology was adopted, the Commission would assess the situation in Russia again in the light of the latest available information.
Responding to Luis Garicano (Renew Europe, Spain), who wanted to know whether the UK would be subject to a careful assessment, Mr Merlin emphasised that the country remains bound by EU law, including the anti-money laundering directive, during the transition period. He added: "Once the UK is out of the transition period, we will of course pay great attention to the situation in the UK". (Original version in French by Marion Fontana)