The European Commission has added seven countries including Saudi Arabia, Panama, and Nigeria to a blacklist of nations that pose a threat because of lax controls on terror financing and money laundering.
The new countries targeted by the commission on Wednesday join another 16 already on this register, bringing the total up to 23.
The commission said it added jurisdictions with “strategic deficiencies in their anti-money laundering and counter-terrorist financing frameworks”.
The move is part of a crackdown against money laundering after several scandals hit European Union banks in recent months.
But it has triggered criticism from several EU states worried about their economic relations with the listed states, notably Saudi Arabia.
“We have established the strongest anti-money laundering standards in the world, but we have to make sure that dirty money from other countries does not find its way to our financial system,” Vera Jourova, European Commissioner for Justice said in a statement.
“Dirty money is the lifeblood of organised crime and terrorism,” she added, urging countries on the list to “swiftly remedy their deficiencies”.
The 28 EU states now have one month, which can be extended to two, to endorse the list. They could reject it by qualified majority.
Jourova, who proposed the list, told a news conference in Strasbourg she was confident states would not block it.
Inclusion on the list does not trigger sanctions, but it does oblige European banks to apply tighter controls on transactions with customers and institutions in those countries.
In a statement published by Saudi Press Agency early on Thursday, Riyadh said it regretted the commission’s decision to include the kingdom on the list.
“Saudi Arabia’s commitment to combating money laundering and the financing of terrorism is a strategic priority and we will continue to develop and improve our regulatory and legislative frameworks to achieve this goal,” the statement quoted Saudi Finance Minister Mohammed al-Jadaan as saying.
‘Russia, UK missing’
Brussels also added to its list Libya, Botswana, Ghana, Samoa, the Bahamas and the four United States territories of American Samoa, US Virgin Islands, Puerto Rico and Guam.
The other listed states are Afghanistan, North Korea, Ethiopia, Iran, Iraq, Pakistan, Sri Lanka, Syria, Trinidad and Tobago, Tunisia and Yemen.
Bosnia Herzegovina, Guyana, Laos, Uganda and Vanuatu were removed.
Despite pressure to exclude Riyadh from the list, the commission decided to list the kingdom, confirming a Reuters report in January.
The move comes as tensions between Riyadh and European capitals are heightened over the murder last year of the columnist Jamal Khashoggi at the Saudi consulate in Istanbul.
The Saudi government media office did not immediately respond to a request for comment by the Reuters news agency.
Critics said the list fell short of including several countries that have been involved in money-laundering scandals in Europe.
“Some of the biggest dirty-money washing machines are still missing. These include Russia, the City of London and its offshore territories as well as Azerbaijan,” said EU green legislator Sven Giegold, who sits in the European Parliament special committee on financial crimes.
MEP Eva Joly, a former investigating judge, welcomed the new list but suggested the commission “publish the country assessments in order to increase the transparency of the process and avoid accusations of political bargaining”.
European countries such as Cyprus or the UK should also be on the list, she said.
Panama said it should be removed from the list because it recently adopted stronger rules against money laundering.
Jourova said the commission will continue closely monitoring other jurisdictions not yet listed, including the US and Russia.
The EU list is larger than that compiled by the Financial Action Task Force (FATF), a global body, which currently includes 12 jurisdictions – all on the EU blacklist – but excludes Saudi Arabia, Panama and US territories. The FATF will update its list next week.