Delegated Regulation supplementing Directive (EU) 2015/849 by identifying high-risk third countries with strategic deficiencies

Author (Corporate)
Series Details C (2019) 1326
Publication Date 13/02/2019
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Delegated Regulation - adopted by the European Commission in February 2019 - identifying high-risk third countries that present strategic deficiencies in their regime on anti-money laundering and counter terrorist financing (AML/CFT).

Further information:

The Commission established a list of 23 third countries with strategic deficiencies in their anti-money laundering and counter-terrorist financing frameworks. The aim of this list is to protect the European Union's financial system by better preventing money laundering and terrorist financing risks. As a result of the listing, banks and other entities covered by EU anti-money laundering rules are required to apply increased checks (due diligence) on financial operations involving customers and financial institutions from these high-risk third countries to better identify any suspicious money flows.

For each country, the Commission assessed the level of existing threat, the legal framework and controls put in place to prevent money laundering and terrorist financing risks and their effective implementation. The Commission also took into account the work of the Financial Action Task Force (FATF), the international standard-setter in this field.

Following the entry into force of the Fourth Anti-Money Laundering Directive in 2015, the Commission published a first EU list of high-risk third countries based on the assessment of the Financial Action Task Force. The Fifth Anti-Money Laundering Directive broadened the criteria for the identification of high-risk third countries, including notably the availability of information on the beneficial owners of companies and legal arrangements. The list published on 13 February 2019 replaced the one in place since July 2018.

However, the Council of the European Union decided unanimously on 7 March 2019 to reject the draft list put forward by the Commission. In a Resolution adopted on 14 March, the European Parliament criticised the Council's rejection of the draft money laundering blacklist. A delegated act can enter into force only if no objection was expressed by the European Parliament or by the Council within a period of one month of the notification of the act.

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Commentary and Analysis
OCCRP, 09/03/2019: EU rejects landmark money-laundering measure

Euronews, 13/02/2019: EU puts Saudi Arabia on dirty-money blacklist
Reuters, 13/02/2019: EU adds Saudi Arabia to dirty-money blacklist, upsets UK, U.S.
Politico, 13/02/2019: Brussels’ dirty money blacklist triggers US backlash
EurActiv, 13/02/2019: Commission adopts stricter blacklist of money launderers
Reuters, 13/02/2019: Panama to call its EU envoy for consultations over 'high risk' list
Deutsche Welle, 14/02/2019: EU looks to add Saudi Arabia to 'dirty-money' blacklist
Foreign Policy, 15/02/2019: The EU’s Dirty Money Blacklist: North Korea, Syria, and… Puerto Rico?
France24, 01/03/2019: US welcomes demise of EU money-laundering blacklist plan
Politico, 01/03/2019: EU countries revolt against Commission’s dirty money list
Bloomberg, 05/03/2019: EU Justice Chief Stands by Dirty Money List Targeting Saudis
Reuters, 07/03/2019: EU states block blacklisting Saudi, Panama over dirty money
Bloomberg, 07/03/2019: EU States Reject Dirty-Money List Targeting Saudis, Puerto Rico

European Commission: Press Release, 13/02/2019: European Commission adopts new list of third countries with weak anti-money laundering and terrorist financing regimes
European Commission: Fact Sheet, 13/02/2019: Anti-money laundering: Q & A on the EU list of high-risk third countries
Council of the European Union: Press Release, 07/03/2019: Money laundering and terrorist financing: Council returns draft list of high risk countries to the Commission
European Parliament: Press Release, 14/03/2019: Parliament criticises Council's rejection of money laundering blacklist
European Parliament: Legislative Observatory: Procedure File for Resolution on urgency for an EU blacklist of third countries in line with the Anti-Money Laundering Directive

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