The European Commission’s attempt to include Saudi Arabia in its money-laundering blacklist has been struck a heavy blow by EU member states. The virtually unanimous opposition against the inclusion of Saudi along with four US territories means that the Commission will have to go back to the drawing board and work with European governments to devise a new methodology; presumably one that does not place the oil rich Kingdom under special restriction.
Twenty-seven of the 28 countries, led by the UK, France, Germany, and the Netherlands, blocked the publication of the list, which has been the source of tension and intense lobbying. Only Belgium didn’t actively oppose it. Riyadh rolled out its big guns during the summit of EU and Arab League leaders earlier this week in Sharm Al-Sheikh.
It was reported that at that meeting, British Prime Minister Theresa May discussed the issue with the Saudi King and that Britain and France were leading the group of EU countries opposed to the kingdom’s inclusion on the list. Concerns over being blacklisted promoted Riyadh to threaten to cut contracts with EU states if the list was approved.
According to a note of the meeting seen by the Financial Times, Saudi ministers warned that the blacklist would have “severe negative consequences” for the kingdom’s trade and financial flows with Europe.
The blacklist was first adopted by the EU justice commissioner Vera Jourova on 13 February 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.
Brussels argued that the list used tough criteria to protect Europe’s banking system from illicit cash flows after a series of high-profile money laundering scandals. But the Saudis and the US strongly disapproved and dismissed the exercise as being “purely political”.
The strength of opposition means the European Commission will have to rethink its draft list of 23 non-EU territories deemed to be failing in fighting money laundering.