The European Commission has adopted its new list of 23 third countries with strategic deficiencies in their anti-money laundering and counter-terrorist financing frameworks.
The countries included Afghanistan, American Samoa, The Bahamas, Botswana, Democratic People’s Republic of Korea, Ethiopia, Ghana, Guam, Iran, Iraq, Libya, Nigeria, Pakistan, Panama, Puerto Rico, Samoa, Saudi Arabia, Sri Lanka, Syria, Trinidad and Tobago, Tunisia, US Virgin Islands and Yemen.
“The aim of this list is to protect the EU financial system by better preventing money laundering and terrorist financing risks,” the commission stated in a media release on Wednesday. “As a result of the listing, banks and other entities covered by EU anti-money laundering rules will be required 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.”
On the basis of a new methodology, which reflects the stricter criteria of the 5th anti-money laundering directive in force since July 2018, the list has been established following an in-depth analysis.
Věra Jourová, Commissioner for Justice, Consumers and Gender Equality, said, “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. Dirty money is the lifeblood of organised crime and terrorism. I invite the countries listed to remedy their deficiencies swiftly. The commission stands ready to work closely with them to address these issues in our mutual interest.”
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 listed countries are already on the current EU list, which includes 16 countries.