The Strategist

US, Saudi Arabia protest against EU money laundering list

02/15/2019 - 11:25

The US authorities very sharply reacted to publication of the EU blacklist of countries that pose a threat due to a weak fight against money laundering and financing of terrorism. The US protested against blacklisting of four unincorporated American island territories - Puerto Rico, Guam, American Samoa and the US Virgin Islands. The list of 23 countries also includes Saudi Arabia and other territories, the government of which also expressed its opposition to the EU stance.

The recently published list of the EU includes countries that, according to European authorities, are not actively counteracting money laundering and financing of terrorist activities. “The aim of the list is to protect the EU financial system in order to better prevent money laundering and risks associated with financing of terrorism,” reads a statement by the EU Legal Affairs Department. The EU believes that banks and other organizations that want to comply with the EU anti-money laundering regulations should conduct a more thorough, additional review of all financial transactions, including transactions with individuals and legal entities associated with countries from the list.

“We have set the most stringent anti-money laundering standards in the world, but at the same time we want to be sure that dirty money from other countries will not end up in our financial system,” said Věra Jourová, head of the EU Legal Affairs Office.

According to her, dirty money is a breeding ground for organized crime and terrorism. “I invite authorities of the countries mentioned in the list to immediately correct the flaws. In turn, the European Commission declares its readiness to resolve these issues, since such cooperation is mutually beneficial,” she said.

The EU list contains 23 countries and territories: Afghanistan, American Samoa, Bahamas, Botswana, Democratic Republic of Congo, Ethiopia, Ghana, Guam, Iran, Iraq, Libya, Nigeria, Pakistan, Panama, Puerto Rico, Samoa, Saudi Arabia, Syria, Sri Lanka, Trinidad and Tobago, Tunisia, US Virgin Islands, Yemen.

The US Treasury followed publication of the list with a sharp statement. Guam, Puerto Rico and the US Virgin Islands that have been included in the list, are unincorporated organized territories of the United States, and American Samoa is an unincorporated unorganized territory of the United States. Such territories are actually under the administration of the US government, but are not officially part of any state.

The statement says that “the US Department of the Treasury has considerable doubts about content of the list and the imperfect process in which it was compiled. The Treasury Department rejects the inclusion of American Samoa, Guam, Puerto Rico and the US Virgin Islands on this list.” At the same time, the Ministry of Finance noted that within the framework of the work of the International Working Group on Combating Financial Crimes (FATF), the United States closely cooperates with the European Commission and 15 EU member states, and distributes FATF requirements for combating money laundering to both the federal territory and unincorporated territories.

The Ministry of Finance expressed surprise that the European Commission did not provide it with any opportunities to discuss the issue of inclusion in the list of American territories.
Saudi Arabia also disagrees with the EU’s decision. “We express our regret over the inclusion in the list of countries that pose a high risk of non-opposition to money laundering and financing of terrorism,” Saudi Press Agency said in a statement. The country's finance minister, Mohammed al-Jadaan, urged EU representatives to visit Riyadh and see for themselves that the kingdom authorities at all levels - both regional and international - are "committed to the fight against money laundering and the financing of terrorism."