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EU adds Saudi Arabia to dirty-money blacklist, upsets Britain

Reuters  |  STRASBOURG 

By Francesco Guarascio

STRASBOURG (Reuters) - The added Saudi Arabia, Panama, Nigeria and other jurisdictions to a blacklist of nations seen as posing a threat because of lax controls on terrorism financing and money laundering, the EU said on Wednesday.

The move is part of a crackdown on money laundering after several scandals at EU banks but has been criticised by several EU countries including Britain worried about their economic relations with the listed states, notably

The said it regretted the decision in a statement published by the Saudi Press Agency, adding: "Saudi Arabia's commitment to combating money laundering and the financing of terrorism is a strategic priority".

said it should be removed from the list because it recently adopted stronger rules against money laundering.

Despite pressure to exclude from the list, the commission decided to list the kingdom, confirming a report in January.

Apart from reputational damage, inclusion on the list complicates financial relations with the EU. The bloc's banks will have to carry out additional checks on payments involving entities from listed jurisdictions.

The list now includes 23 jurisdictions, up from 16. The commission said it added jurisdictions with "strategic deficiencies in their anti-money laundering and countering terrorist financing regimes".

Other newcomers to the list are Libya, Botswana, Ghana, Samoa, the and the four territories of American Samoa, U.S. Virgin Islands, and

The other listed states are Afghanistan, North Korea, Ethiopia, Iran, Iraq, Pakistan, Sri Lanka, Syria, Trinidad and Tobago, and

Bosnia, Guyana, Laos, and were removed.

BAD FOR BUSINESS?

The 28 EU member states now have one month, which can be extended to two, to endorse the list. They could reject it by qualified majority. EU Vera Jourova, who proposed the list, told a conference that she was confident states would not block it.

She said it was urgent to act because "risks spread like wildfire in the sector".

But concerns remain. Britain, which plans to leave the EU on March 29, said on Wednesday the list could "confuse businesses" because it diverges from a smaller listing compiled by its (FATF), which is the global standard-setter for anti-money laundering.

The FATF list includes 12 jurisdictions - all on the EU blacklist - but excludes Saudi Arabia, and U.S. territories. The FATF will update its list next week.

has led a pushback against the EU list in past days, and at closed-door meetings urged the exclusion of Saudi Arabia, EU sources told

The is a major importer of goods and weapons from the EU and several top British banks have operations in the country. of Scotland is the European with the largest turnover in Saudi Arabia, with around 150 million euros ($169 million) in 2015, according to public data.

is Europe's most successful in It booked profits of 450 million euros in 2015 in the kingdom but disclosed no turnover and has no employees there, according to public data released under EU rules.

"The UK will continue to work with the Commission to ensure that the list that comes into force provides certainty to businesses and is as effective as possible at tackling illicit finance," a British said.

MISSING "WASHING MACHINES"

Criteria used to blacklist countries include weak sanctions against money laundering and terrorism financing, insufficient cooperation with the EU on the matter and lack of transparency about the beneficial owners of companies and trusts.

Five of the listed countries are already included on a separate EU blacklist of tax havens. They are Samoa, and the three U.S. territories of American Samoa, and

Critics said the list fell short of including several countries involved in money-laundering scandals in

"Some of the biggest dirty-money washing machines are still missing. These include Russia, the City of and its offshore territories, as well as Azerbaijan," said Greens lawmaker Sven Giegold, who sits in the special committee on financial crimes.

Jourova said the commission will continue monitoring other jurisdictions not yet listed. Among the states that will be closely monitored are the and

($1 = 0.8861 euros)

(Additional reporting by Alistair Smout in and Mohamed El-Sherif in Cairo; Writing by in Brussels; editing by and Rosalba O'Brien)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Thu, February 14 2019. 06:50 IST
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