Europe Names And Shames Nigeria, Panama And Saudi Arabia Over Money Laundering, Terrorist Financing

E.U. Commissioner for Justice, Consumers and Gender Equality Vera Jourova. (Photo: Thierry Monasse/Getty Images) via Forbes


The European Commission has unveiled a list of 23 countries which it says have “strategic deficiencies in their anti-money laundering and counter-terrorist financing frameworks”.

The announcement is likely to set off a fierce lobbying effort by the affected countries, which include the likes of Nigeria, Panama and Saudi Arabia which have extensive financial dealings with Europe.

“We have to make sure that dirty money from other countries does not find its way to our financial system,” said Věra Jourová, European Commissioner for Justice, Consumers and Gender Equality, when announcing the list on February 13. “Dirty money is the lifeblood of organised crime and terrorism. I invite the countries listed to remedy their deficiencies swiftly.”

Other countries on the list include Botswana, Ghana and Libya and a host of small Pacific and Caribbean island states such as Guam, Samoa, The Bahamas and the U.S. Virgin Islands.

European banks will have to carry out increased due diligence checks on any transactions involving customers or other financial institutions in these countries, in order to try and identify any suspicious activity.

The Commission has not specified what the problems are with each jurisdiction, but it says it reviewed each of them based on the level of existing threat, the controls they have in place to tackle money laundering and terrorist financing and how those rules were being implemented. The 23 countries were all judged to have “strategic deficiencies” in their anti-money laundering and counter terrorist financing regimes.

The Commission says it also took into account the work of the Paris-based Financial Action Task Force (FATF). In September, FATF issued its own warning about Saudi Arabia, saying Riyadh was failing to effectively investigate and prosecute individuals involved in large money laundering scams, failing to co-operate with other countries to go after the proceeds of crime and ignoring terrorist fundraising by groups active outside the kingdom.

The new list – which replaces a previous list of 16 countries issued in July 2018 – will now be submitted to the European Parliament and Council for approval. Some E.U. member states have reportedly been lobbying to keep Saudi Arabia and Panama off the list – the U.K. is thought to be particularly concerned about Saudi Arabia’s inclusion, while the Spanish government has been pushing to remove Panama.

Their efforts may not be in vain, given that other countries have been successful in being delisted ni the past. Bosnia-Herzegovina, Guyana, Lao, Uganda and Vanuatu all featured on the July 2018 blacklist but their names have been omitted from the revised version. However, 10 countries from the previous list also feature on the latest version, including Afghanistan, Ethiopia, Iran, Iraq and North Korea.

The blacklist is part of a wider push by Brussels to force other countries to do more to clamp down on dubious financial transactions. In December 2017, the Commission issued a list of 17 jurisdiction which it said were failing to meet good governance standards on taxation. Since then, many of them have been delisted after making specific commitments around their tax systems, but five remain: Guam, Samoa, American Samoa, the U.S. Virgin Islands and Trinidad and Tobago.

While such efforts are welcomed by campaigners, some observers say there are notable shortcomings in the Commission’s latest list, which doesn’t include more powerful countries or any EU member states.

“An E.U. money-laundering blacklist that doesn’t include the world’s biggest secrecy jurisdictions – such as the U.S. – is an exercise in diplomacy, not a tool to fight corruption,” says Nienke Palstra, Anti-Corruption Campaigner at Global Witness. “With huge global money laundering scandals coming out of Europe, such as Danske Bank, the EU should urgently be tackling financial crime within and beyond its borders.”

Dominic Dudley is a freelance journalist with almost two decades' experience in reporting on business, economic and political stories in the Middle East, Africa, Asia and Europe.