Saudi Arabia regrets EU inclusion in dirty-money blacklist as US ignores it

Pedro Gonçalves
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Saudi Arabia regrets EU inclusion in dirty-money blacklist as US ignores it

Saudi Arabia said it regrets the decision by the European Commission to place the kingdom on a blacklist of countries and territories accused of posing a high risk of money laundering and financing terrorism.

"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," Saudi Finance Minister Mohammed al-Jadaan said in a statement published by Saudi Press Agency.

"Saudi Arabia notes with regret the European Commission proposed revised list of high risk countries," reported Saudi Press Agency.

"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"

Riyadh is being considered for the blacklist "despite several measures of reinforcement of its legal framework which has led to increased cooperation with its counterparts," the report added.

The minister invited European Commission officials and members of the European Parliament to visit Riyadh to learn about the kingdom's ongoing efforts and initiatives to combat money-laundering and the financing of terrorism at local, regional and international levels.

The inclusion to this blacklist threatens the investment from EU-related financial institutions, who had been targeted by Crown Prince Mohammed bin Salman (MBS) as part of his Vision 2030 reform package. Also, Saudi citizens using EU-regulated financial institutions can expect greater scrutiny of their accounts, with transfers potentially being delayed or disrupted.

The EU list includes Saudi Arabia and Panama, but also US territories such as the US Virgin Islands and Puerto Rico, placing them alongside the likes of Iran, Syria and North Korea. Banks in the EU will be required to use increased due diligence on financial operations involving customers and financial institutions from the blacklisted countries

However, the US Treasury Department told American banks they can ignore the updated blacklist of dirty-money hotspots, calling into question the EU's methodology for developing the list, the WSJ reports.

EU Justice Commissioner Věra Jourová said the list was aimed at ensuring "dirty money from other countries does not find its way into our financial system." She urged the listed countries "to remedy their deficiencies swiftly."

The US Treasury Department said it "has significant concerns about the substance of the list," pointing that its development was flawed. It added it did not expect US financial institutions to take the European Commission's list into account as they carry out anti-money-laundering compliance. 

It also said that the FATF is the global standard-setting body for combating money laundering, terrorist financing and proliferation financing,  — the members of which include the US, the European Commission, 15 EU member states and 20 other jurisdictions — and that the task force already compiles a list of high-risk countries as part of a careful and comprehensive process.

The blacklist will now go to the European Parliament and member states for approval over the next few weeks.