Saudi Arabia Blacklisted by the EU for Money Laundering Failures

Local Editor

Brussels will name Saudi Arabia on a blacklist of countries and jurisdictions that are failing in the fight against money laundering and terrorist financing, a move that will require European banks to carry out intrusive vetting of customers from the Gulf kingdom.

EU officials said the European Commission was in the final stages of adopting the 23-country list, which is likely to be politically contentious and will accuse governments of “strategic deficiencies” in their efforts to combat dirty money. 

Under EU law, Europe’s banks will have to carry out “enhanced” checks on funds coming from Saudi Arabia — essentially more intrusive vetting of customers to establish the purpose of payments, the origins of the money, and the true beneficial owners of companies involved.

Banks would be required to act on suspicions by steering clear of dubious transactions and passing any concerns onto the authorities. 

The move against Saudi Arabia is likely to stoke tensions between Riyadh and European capitals already heightened by the murder last year of the columnist Jamal Khashoggi at the Saudi consulate in Istanbul.

Relatively, Brussels and European countries raised serious concerns about the Khashoggi case — which Riyadh has blamed on a rogue operation – but have so far shied away from tough action. 

Saudi diplomats in Brussels could not immediately be reached for comment.  The blacklist, the first of its kind from the commission, marks Brussels’ attempt to get on the front foot after last year’s high-profile laundering scandals such as revelations that as much as €200bn of dirty money went through the Estonian branch of Danske Bank — which damaged faith in national regulators’ and banks’ enforcement of EU rules.

Brussels is seeking to draw up a more comprehensive list than the one compiled at international level by the Financial Action Task Force, an organization established 30 years ago by the G7.

Source: Financial Times, Edited by website team