EU to add Saudi Arabia to dirty money blacklist despite resistance

The European Commission is expected to name Saudi Arabia in a list of high-risk countries that fail to fight money laundering, despite resistance from Germany, France and the UK, according to a report by the Financial Times on Friday.

The blacklist, deemed a naming-and-shaming exercise by the EU, includes the Gulf kingdom and more than 20 other territories over alleged failures to fight illicit cash flows, the paper said citing European Union officials.

Germany, France and the UK are opposed to the commission taking a tougher stance against anti-money laundering than other global authorities, although an official believes their view on the move could be too late.

“Member states had plenty of time to respond to the list but have only woken up now because of the Saudis,” said an EU official, according to the Financial Times.

The UK noted “serious concerns” over the EU’s plans with other capitals, suggesting governments require more consultation before countries were placed on the list. Meanwhile, France said that while the naming of territories was a “technical” exercise it was also “very political”. 

A total of 30 days will be given to EU governments and MEPs to hold votes to block the approval of the list, although officials believe it was highly unlikely.  

“The blacklist is bitterly needed. Member states must not cannibalise it,” said Sven Giegold, a Green MEP.  

The EU's current list, is made up of 16 countries, including Iran, Iraq, Syria, Afghanistan, Yemen and North Korea. The former list was based on the criteria set out by the Financial Action Task Force [FATF] - body developed to combat money laundering and terrorism financing. The updated list follows new criteria developed by the EU Commission in 2017.

Countries are blacklisted if they "have strategic deficiencies in their anti-money laundering and countering the financing of terrorism regimes that pose significant threats to the financial system of the Union," the existing EU list said.

The move is considered a setback for Riyadh, which is still reeling from damaged image following the brutal murder of journalist Jamal Khashoggi.

Khashoggi, a Washington Post contributor, was murdered on October 2 in Turkey in what Saudi Arabia called a "rogue" operation, tipping the kingdom into one of its worst diplomatic crises.

Inclusion of Saudi Arabia on the list will cause further damage to the kingdom's reputation as well as complicate financial relations with EU states.

The EU is due to approve the updated list next week.

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