MEPs are pushing the EU Commission to re-assess which countries should be included on the blacklist of uncooperative money laundering jurisdictions. A joint vote of the Economic and Monetary Affairs (ECON) and Civil Liberties (LIBE) committees asked the Commission to rethink the list in a resolution on Wednesday. The resolution will now be put to a vote in the upcoming plenary.
The EU Commission identifies high-risk third countries which are then subject to increased customer due diligence measures. The most recent blacklist from July 2016 includes eleven countries. In January 2017, the European Parliament rejected a Commission Delegated Act to remove the State of Guyana. The Commission now proposes simply following the recommendations of the Financial Action Task Force (FATF), the international forum against money laundering and terrorist financing, and replacing Guyana with Ethiopia. ECON and LIBE today rejected this copy pasting as insufficient.
MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group commented:
“The EU Commission’s blacklist of countries bearing a high risk of money laundering is ridiculous. The list doesn’t contain any single important offshore financial centre. Replacing Guyana with Ethiopia in response to the European Parliament’s criticism seems like some kind of bad joke from the Commission. It obviously makes no effort to take the concerns of Parliament seriously.
The EU needs a real blacklist of money laundering countries. Faced with the recent leaks on money laundering and tax evasion, it is unacceptable that Panama and other important tax havens are still not included on the Commission’s blacklist.
Instead of just following the limited recommendations of the Financial Action Task Force (FATF), the Commission must carry out its own assessment and urgently allocate more staff to combat money laundering and terrorist financing. The EU Commission is unable to carry out its important tasks in combating financial crimes with just six people working in the basement of the Directorate-General for Justice and Consumer Protection. Personnel and resources must be boosted to at least 20 employees in the short term.”
The European Commission’s July 2016 blacklist for high-risk money laundering countries included the following 11 countries: Afghanistan, Bosnia, Guyana, Iraq, Laos, Syria, Uganda, Vanuatu, Yemen, North Korea and Iran. The latest Commission delegated act aims to remove Guyana from the black list and replace it with Ethiopia. The list does not include any of the major offshore financial centers.
On 19 January 2017, the European Parliament adopted a resolution on the rejection of the Commission delegated act of 24 November 2016:
http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P8-TA-2017-0008+0+DOC+XML+V0//EN
Delegated act of the European Commission of 24 March 2017 amending the list of non-cooperative money laundering third countries:
Letter from EU Justice Commissioner Vera Jourova to the Chairs of the ECON, LIBE and PANA committees:
Letter Jourova to ECON, LIBE and PANA on high risk third countries
Resolution of the ECON-LIBE Committee rejecting the delegated act of the Commission of 24 March 2017:
Draft Motion for Resolution on COM DA of 24 March 2017
Amendments tabled to the resolution of the ECON-LIBE Committee rejecting the delegated act of the Commission of 24 March 2017:
Amendments to Draft Motion for Resolution on COM DA of 24 March 2017
Criteria to blacklist countries according to the fourth Anti-money laundering directive (Article 9 paragraph 2 of Directive (EU) 2015/849):
Third-country policy – Article 9
- Third-country jurisdictions which have strategic deficiencies in their national AML/CFT regimes that pose significant threats to the financial system of the Union (‘high-risk third countries’) shall be identified in order to protect the proper functioning of the internal market.
- The Commission shall be empowered to adopt delegated acts in accordance with Article 64 in order to identify high-risk third countries, taking into account strategic deficiencies, in particular in relation to:
(a) the legal and institutional AML/CFT framework of the third country, in particular:
(i) criminalisation of money laundering and terrorist financing;
(ii) measures relating to customer due diligence;
(iii) requirements relating to record-keeping; and
(iv) requirements to report suspicious transactions;
(b) the powers and procedures of the third country’s competent authorities for the purposes of combating money laundering and terrorist financing;
(c) the effectiveness of the AML/CFT system in addressing money laundering or terrorist financing risks of the third country.
- The delegated acts referred to in paragraph 2 shall be adopted within one month after the identification of the strategic deficiencies referred to in that paragraph.
- The Commission shall take into account, as appropriate, when drawing up the delegated acts referred to in paragraph 2, relevant evaluations, assessments or reports drawn up by international organisations and standard setters with competence in the field of preventing money laundering and combating terrorist financing, in relation to the risks posed by individual third countries.