Photo © Maksym Yemelyanov – Fotolia
(BRUSSELS) – Saudi Arabia has been added to the EU’s list of 23 third countries with strategic deficiencies in their anti-money laundering and counter-terrorist financing frameworks, revealed Wednesday by the Commission.
The list serves to protect the EU financial system by better preventing money laundering and terrorist financing risks. As a result of the listing, banks and other entities covered by EU anti-money laundering rules need to apply increased checks (due diligence) on financial operations involving customers and financial institutions from these high-risk third countries to better identify any suspicious money flows. The list was established following an analysis based on new methodology which reflects stricter criteria in the 5th anti-money laundering directive in force since July 2018.
“We have established the strongest anti-money laundering standards in the world, but we have to make sure that dirty money from other countries does not find its way to our financial system,” said the Justice Commissioner Vera Jourova: “Dirty money is the lifeblood of organised crime and terrorism. I invite the countries listed to remedy their deficiencies swiftly.” She added that the EU executive was ready to work closely with the countries to address these issues “in our mutual interest”.
The Commission is mandated to carry out an autonomous assessment and identify the high-risk third countries under the Fourth and Fifth Anti-Money Laundering Directives.
The list has been established on the basis of an analysis of 54 priority jurisdictions, which was prepared by the Commission in consultation with the Member States and made public on 13 November 2018. The countries assessed meet at least one of the following criteria:
- they have systemic impact on the integrity of the EU financial system,
- they are reviewed by the International Monetary Fund as international offshore financial centres;
- they have economic relevance and strong economic ties with the EU.
For each country, the Commission assessed the level of existing threat, the legal framework and controls put in place to prevent money laundering and terrorist financing risks and their effective implementation. The Commission also took into account the work of the Financial Action Task Force (FATF), the international standard-setter in this field.
The Commission concluded that 23 countries have strategic deficiencies in their anti-money laundering/ counter terrorist financing regimes. This includes 12 countries listed by the Financial Action Task Force and 11 additional jurisdictions. Some of the countries listed today are already on the current EU list, which includes 16 countries.
Delegated Regulation: EU list of high-risk third countries
Money laundering: EU list of high-risk third countries - background guide
Methodology for identifying high-risk third countries
Fourth Anti-Money Laundering Directive
Fifth Anti-Money Laundering Directive
