The European Commission is planning on naming and shaming Saudi Arabia by including the kingdom on its lists of countries failing to fight money laundering. The list, which will be approved next week, has caused a spat within the EU with a number of countries – including the UK – opposing the decision to take a tougher stance against the Gulf state.
Brussels has been seeking a tougher European-level enforcement of anti-money laundering rules to keep dirty money out of its financial system. The result is an anti-money laundering blacklist that will include Riyadh and more than 20 other territories over alleged failures to fight illicit cash flows and terrorist financing.
The list, which is the first of its kind from Brussels, accuses the kingdom of "strategic deficiencies" in its efforts to fight illicit cash flows. Under the EU law, Europe's banks will have to carry out "enhanced" checks on funds coming from these countries. Once approved, banks will be required to steer clear of dubious transactions and pass concerns onto authorities.
Brussels' decision to include Riyadh has caused a spat between the commission and the EU's biggest member states that are opposed to Europe taking a tougher stance on Saudi Arabia. The inclusion of the kingdom, which remains a close western ally despite the murder of the journalist Jamal Khashoggi in Turkey last year, has become a central point of contention in recent weeks.
Governments led by the UK, and including Germany, France, Spain, Italy, Belgium and Greece, criticised the draft blacklist at a meeting of EU ambassadors this week, according to diplomats cited in the Financial Times. The UK said it had "serious concerns" over the commission's plans with other capitals agreeing that governments needed more consultation before countries were placed on the list.
EU officials dismissed the criticism saying: "Member states had plenty of time to respond to the list but have only woken up now because of the Saudis." The Commission's President, Jean-Claude Juncker, and the justice commissioner, Vera Jourova, will be ploughing ahead with Saudi's inclusion when the blacklist is expected to be signed off by the college of commissioners next week.
"The blacklist is bitterly needed. Member states must not cannibalise it," said Sven Giegold, a Green MEP.
EU governments and MEPs will have 30 days to hold votes to block its approval; an outcome that is said to be highly unlikely.