EU set to remove Saudi Arabia from blacklist

Pedro Gonçalves
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EU set to remove Saudi Arabia from blacklist

The adoption of a European Union money-laundering blacklist which includes Saudi Arabia could be blocked after virtually unanimous opposition from EU member states, two EU diplomats told Reuters.

The news agency says Saudi Arabia's King Salman had sent letters to all 28 EU leaders urging them to not include Riyadh on the register, noting it could affect trade with the EU. It also comes after the Saudis paid the College of Europe to set up private meetings with EU institutions.

Some governments opposed adopting the provisional list on Thursday, triggering a process that could lead to it being delayed or withdrawn, the diplomats said. 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 US territories of American Samoa, US Virgin Islands, Puerto Rico and Guam. 

They are really rolling out big guns"

For the list to be blocked, a majority of 21 states is estimated to be necessary. EU officials said that over 20 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 this Friday  in Brussels is expected to clarify each of the 28 EU states' positions on the matter.

According to a draft statement seen by the Financial Times, governments  will say it was not drawn up in a "transparent and credible process".  "We jointly call for a listing that meets our high standards and thereby further strengthens anti-money laundering and the combat against terrorist financing," says the statement.

"We jointly call for a listing that meets our high standards and thereby further strengthens anti-money laundering and the combat against terrorist financing," said the statement.

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 diplomat said the Saudi lobby had intensified at the summit of EU and Arab League leaders earlier this week in Sharm el-Sheikh. 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 oil-rich kingdom is a major importer of EU weapons and goods.

While the current list may not survive, EU governments have said they're determined to stamp out money laundering after a series of scandals. Several of the bloc's biggest banks, including Danske Bank A/S, Deutsche Bank AG and Swedbank AB, have been implicated in money-laundering allegations, raising doubts about the quality of supervision and enforcement across the continent.

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.