Committees again reject blacklist of states at risk of money laundering

The EU should have an autonomous process for judging whether countries are at high-risk of money laundering, say committee MEPs after rejecting for a second time, by 61 votes to 7 with 32 abstentions, a blacklist of countries drawn up by the EU Commission.

The Commission is responsible for producing, under the EU’s Anti-Money Laundering Directive, an inventory of countries thought to be at risk of money laundering, tax evasion and terrorism financing. People and legal entities from blacklisted countries face tougher than usual checks when doing business in the EU.

An earlier list, drawn up last year — a duplicate of one produced by the international body, the Financial Action Task Force (FATF) — was rejected as too limited by Parliament.

In Wednesday’s resolution, MEPs from the Economic and Monetary Affairs Committee and the Civil Liberties, Justice and Home Affairs Committee said “the Commission’s process was not sufficiently autonomous” and that the criteria for its list excluded offences giving rise to money laundering, such as tax crimes.

MEPs say the Commission should not be bound by FATF standards when drawing up its own blacklist, which they want to be more expansive and wide-ranging. The Commission says this would require more resources than it has.

The Commission currently identifies eleven countries, including Afghanistan, Iraq, Bosnia and Herzegovina, and Syria, which it judges to be deficient in countering money laundering and terrorist financing. This second update makes a minor change to the previous list by dropping Guyana and adding Ethiopia.

Next steps

The resolution now goes to plenary.  If it is supported by more than half of the constituent members of Parliament, the delegated act will be rejected.