BRUSSELS – The European Commission is set to add Panama, the Bahamas and Mauritius to its list of countries that pose financial risks to the bloc because of failings on money laundering and terrorism financing, a draft document shows.
The document, seen by Reuters and expected to be published on Thursday, expands an existing blacklist but spares Saudi Arabia and U.S. territories that had been added to a previous listing before being shelved following foreign pressure.
The Commission is also set to put Barbados, Botswana, Cambodia, Ghana, Jamaica, Mongolia, Myanmar, Nicaragua and Zimbabwe on the European Union list.
Countries on the list “pose significant threats to the financial system of the Union,” says the draft document, which is still subject to changes.
Under EU law, banks and other financial and tax firms are obliged to scrutinise more closely their clients who have dealings with these countries. Companies in listed states are also banned from receiving new EU funding.
The draft decision brings the current list from 16 to 22 states which will be closely monitored, although the higher scrutiny will only apply from October, the document says – a lenient approach the Commission said was due the disruptions caused by the current coronavirus pandemic.
Countries who were already on the list are Afghanistan, Iraq, Vanuatu, Pakistan, Syria, Yemen, Uganda, Trinidad and Tobago, Iran and North Korea.
All countries but North Korea have committed to changing their rules in order to better tackle money laundering and terrorism financing.
The EU listing left out Saudi Arabia, the current holder of the G20 presidency. The Saudis were included in an EU draft list last year until that document was struck down by EU governments after pressure from the oil-rich kingdom.
That was an exceptional case as EU member states only rarely interfere with listings which are largely a competence of the Commission, the bloc’s executive arm.
Among other countries who were included in last year’s draft list, but have now been spared, are Libya and the four United States territories of American Samoa, U.S. Virgin Islands, Puerto Rico and Guam. The listing of the U.S. territories had drawn criticism from Washington.
The new EU draft list largely reflects a listing compiled by the Financial Action Task Force (FATF), which is the global standard-setter for efforts to curb money laundering.
The EU list however does not include Albania, a candidate country to join the bloc, and Iceland, a close trading partner of the 27-nation Union. Both countries are on the FATF list.
The Commission has also deleted from its previous list Bosnia, Guyana, Laos, Ethiopia, Sri Lanka and Tunisia, according to the draft document.
The money laundering list is separate from an EU list of tax havens which now comprises 12 jurisdictions, including Panama, the Seychelles and the Cayman Islands.