In Brussels, Belgium, European Union flags fly in front of the Berlaymont building, which houses the European Commission, the EU’s executive arm. (Photo: WIKIMEDIA COMMONS)

In response to outcry from several countries, the European Commission published a new anti-money-laundering action plan this month and added 12 more countries to its AML blacklist.

The addition of The Bahamas, Barbados, Botswana, Cambodia, Ghana, Jamaica, Mauritius, Mongolia, Myanmar, Nicaragua, Panama and Zimbabwe brings the total number of countries to 22. Already included on the list were Afghanistan, Iraq, Vanuatu, Pakistan, Syria, Yemen, Uganda, Trinidad and Tobago, Iran and North Korea.

At the same time, Bosnia-Herzegovina, Ethiopia, Guyana, Laos, Sri Lanka and Tunisia were removed from the list.

The EU said the new guidelines include new methodology designed to better align its blacklist with the Financial Action Task Force list of non-cooperative countries and territories.

Original list

This territory escaped the AML blacklist, which originally was released in February 2019 and included 23 non-EU countries and territories — including the United States Virgin Islands, Puerto Rico, American Samoa, Guam and Saudi Arabia — which, according to the commission, had “strategic deficiencies” in their AML regimes.

However, thanks to heavy lobbying from Saudi Arabia and the US, EU governments rejected the list, criticising the way countries and territories were selected and the short notice they were given to respond to the findings.

Consequently, in September 2019, the EU announced that it planned to revise its methodologies for assembling the list, and neither Saudi Arabia nor any US territories were included on the revised list. The new blacklist will not take effect until October, due to the ongoing Covid-19 crisis.

The AML blacklist is separate from the EU list of non-cooperative tax jurisdictions, which this territory also successfully avoided by passing economic substance legislation that took effect in 2019.

This territory was, however, included on the initial AML shortlist of 54 “priority jurisdictions” the EU Commission first identified in November 2018.

New plan

The commission’s plan said it is necessary for the EU to adjust its approach to countries with deficiencies in their regimes, establishing a single AML rulebook and aligning methodology closer to that used by the FATF. According to the commission, it is currently up to each member state to implement these rules individually, leading to inconsistencies.

“We are determined to step up our efforts so that we are a single global actor in this area,” the commission wrote upon publication of the action plan, which is now open for public consultation until July 29. All blacklisted countries except North Korea have committed to working with the EU in order to change their rules.

The VI was deemed largely compliant by FATF at its last review in 2008.


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