European Union adds Nigeria, Saudi to dirty-money blacklist

European Commission headquarters in Brussels. REUTERS

European Commission headquarters in Brussels. REUTERS

The European Commission added Saudi Arabia, Panama and other jurisdictions to a blacklist of nations that pose a threat to the bloc because of lax controls against terrorism financing and money laundering, the EU executive said Wednesday.

European Commission headquarters in Brussels.

Saudi Arabia did not respond to requests for comment by Middle East Eye at the time of writing.

Despite pressure to exclude Riyadh from the list, the commission chose to list the kingdom, confirming a Reuters report in January.

As well as damage to the countries' reputations, being added to the list makes financial relations with the European Union more complicated.

The list now includes 23 jurisdictions; it previously comprised 16.

"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", EU Justice Commissioner Vera Jourova said in a statement.

Bosnia-Herzegovina, Guyana, Laos, Uganda and Vanuatu were removed from the list.

The proposal must now be approved by European Parliament and the 28 member states, with opposition from France and the United Kingdom against the new list.

"[The list] is a warning to the banking and financial sector that they must use extra caution when dealing with transactions from these countries", she added.

Apart from reputational damage, inclusion on the list complicates financial relations with the EU. Royal Bank of Scotland is the European bank with the largest turnover in Saudi Arabia, with around 150 million euros ($169.28 million) in 2015, according to public data.

The EU released its first ever blacklist past year in the wake of the Panama Papers leak, but was widely criticised for failing to apply its criteria to its own states which have some of the world's worst tax havens. They are Samoa, Trinidad and Tobago and the three U.S. territories of American Samoa, Guam and U.S. Virgin Islands.

"Dirty money is the driving force behind organised crime and terrorism", Jourova continued, urging countries on the list to "quickly remedy their shortcomings". "These include Russian Federation, 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.