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5/27/17

European Parliament Blocks EC Money Laundering Blacklist because they consider it incomplete- by Joe Kirwin

EU Money Laundering Controls
The European Commission will be forced to draw up a new blacklist of countries that facilitate money laundering after the European Parliament overwhelmingly rejected the latest effort that failed to consider countries that enable tax evasion.

EU lawmakers voted 392-80, with 207 abstentions, to reject the list that includes 11 countries, including Afghanistan, Bosnia and Herzegovina, Iraq, North Korea, Yemen and Syria, among others.

These are countries that the Paris-based Financial Action Task Force has signaled as destinations for laundering money or sources of terrorism financing.

Any country that ends up on the money laundering blacklist will face stricter controls when doing business in the EU, to ensure financial stability and general safety.

“We can not accept that the commission relies merely on an international body—the so-called Financial Action Task Force (FATF)—in drawing up a list of jurisdictions with strategic anti-money laundering and counter-terrorism financing,’' said Ana Gomes, a Portuguese parliamentarian from the Socialist and Democrat group, in a May 17 statement.

“How can we explain to our citizens that Panama for instance, which led the Panama Papers scandal, is not even on the list?” she asked.

Parliamentary opposition to the current blacklist also concerns the criteria used by the European Commission. EU lawmakers insist that the list should also include countries that facilitate tax evasion, which the Commission believes is beyond its mandate.

A key difference between the two EU institutions concerns the threshold for identifying beneficial owners of companies. EU member states insist it should be 25 percent or more, whereas the European Parliament wants 10 percent or more. Negotiations will continue in June.

The dispute over the AMLD blacklist is different from a tax haven blacklist that EU member states are due to finalize by the end of 2017.

Currently, EU member states are “screening” 92 countries as candidates for the tax haven blacklist. The U.S. is among the 92 countries.

Read more: European Parliament Blocks EC Money Laundering Blacklist | Bloomberg BNA

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