The adoption of a European Union money-laundering blacklist, which includes Saudi Arabia as well as Puerto Rico and three other US territories, could be blocked by EU governments under a procedure launched on Thursday, two EU diplomats told Reuters.
Some governments opposed adopting the provisional list on Thursday, triggering a process that could lead to it being delayed or withdrawn, the diplomats said.
For the list to be blocked, a majority of 21 states is estimated to be necessary. EU officials said that around 15 countries, including Britain, France and all the big ones, have already declared their opposition to the listing.
“A very substantial amount” of EU states oppose it, an official said. A meeting of national experts on Friday in Brussels is expected to clarify each of the 28 EU states’ positions on the matter.
The EU move came after Saudi Arabia’s King Salman sent letters to all EU leaders urging them to reconsider the inclusion of Riyadh on the list, one of the letters showed.
The listing of the Saudi Kingdom “will damage its reputation on the one hand and it will create difficulties in trade and investment flows between the Kingdom and the European Union on the other,” the King wrote.
The oil-rich kingdom is a major importer of EU weapons and goods.
One diplomat said Washington has also pressured EU countries to scrap the list.
The US Treasury said when the list was approved by the European Commission that the listing process was “flawed” and it rejected the inclusion of the four U.S. territories of American Samoa, US Virgin Islands, Puerto Rico and Guam.
ROLLING OUT BIG GUNS
The diplomat said the Saudi lobby had intensified at the summit of EU and Arab League leaders earlier this week in Sharm el-Sheikh.
At that meeting, British Prime Minister Theresa May discussed the issue with the Saudi King, the diplomat said, adding that Britain and France are leading the group of EU countries opposed to the kingdom’s inclusion on the list. That confirmed a Reuters report earlier in February.
The diplomatic pressure continued on Wednesday when all EU ambassadors in Saudi Arabia were summoned to a meeting at the finance ministry to discuss the matter, the EU diplomat said.
Riyadh has threatened to cut contracts with EU states if the list is approved, one EU official said. “They are really rolling out big guns,” another diplomat said.
The blacklist was first adopted by the EU justice commissioner Vera Jourova on February 13 in line with new EU rules to prevent money laundering and as part of a process agreed with EU states since last summer.
Twenty-three jurisdictions are on the provisional list, including Nigeria, Panama, Libya, the Bahamas and the four US territories.
For the first time, the EU listing used different criteria from those used by the Financial Action Task Force (FATF), which is the global standard-setter for anti-money laundering.
The FATF list is much smaller and does not include Saudi Arabia and US territories.
Countries are blacklisted by the EU 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.”
Under the new EU methodology, jurisdictions could also be blacklisted if they do not provide sufficient information on company ownership or if their rules on reporting suspicious transactions or monitoring financial customers are considered too lax.