What has happened?
On 13 February 2018, the European Commission has added a host of countries to its list of countries with deficiencies in their anti-money laundering (AML) and counter-terrorist financing (CTF) frameworks, bringing the total to 23.
What does this mean?
Saudi Arabia, Panama, Nigeria, the US Virgin Islands and other jurisdictions have been added to a blacklist of countries that pose a threat because of poor controls on money laundering and terrorism financing, according to the European Commission.
Banks and other entities covered by EU AML rules will now have to apply "increased checks" on financial operations involving customers and financial institutions from these high-risk third countries to better identify any suspicious money flows.
The Commission said that the list was established following an analysis of 54 priority jurisdictions, which it prepared in consultation with Member States and made public in November 2018.
According to the Commission, the countries assessed meet at least one of the following criteria:
- they have systemic impact on the integrity of the EU financial system,
- they are reviewed by the International Monetary Fund as international offshore financial centres;
- they have economic relevance and strong economic ties with the EU.
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 work of the Financial Action Task Force (FATF), the international standard-setter in this field, was also taken into account.
The full list is: Afghanistan, American Samoa, the Bahamas, Botswana, North Korea, Ethiopia, Ghana, Guam, Iran, Iraq, Libya, Nigeria, Pakistan, Panama, Puerto Rico, Samoa, Saudi Arabia, Sri Lanka, Syria, Trinidad and Tobago, Tunisia, the US Virgin Islands and Yemen.
What happens now?
The Commission adopted the list in the form of a Delegated Regulation.
This will now go to the European Parliament and Council, which have a month to approve it.
Once approved, the Delegated Regulation will be published in the Official Journaland will enter into force 20 days after its publication.
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