Article by Kevin Holland, photo by Ali Mansuri. This file is licensed under the Creative Commons Attribution-Share Alike 2.5 Generic license.
The EU is believed to be about to add Saudi Arabia to its blacklist of countries failing to guard against money laundering effectively.
The move will force European banks to carry out more extensive compliance checks on transactions involving the country and its citizens. The EU is now finalising its 23 country list.
The list is also thought to include Samoa, Libya and Panama but the big omission is Russia, which has been embroiled in numerous laundering scandals.
The move will mean European banks will need to carry out “enhanced” checks on transactions involving Saudi money. This is a much more intrusive level of vetting, the aim of which is to clarify the true origins of the money in question, as well as the beneficial owners of the companies in question where applicable. The banks must then follow procedure and report any suspicious activity.
Relations between Brussels and Riyadh have been poor of late regardless, mainly due to the Khashoggi murder. But the current move against the Saudis will not be well received.
The Commission is keen to be seen to act tough on money laundering after the enormous Danske scandal that is still unfolding, as reported here on EUAC. The Commission has just released its action plan on clamping down on the notorious ‘golden visa’ schemes in use throughout much of Europe.
The list is due to be formally adopted in February this year. A period of intense dialogue and lobbying is expected and there may be some changes to the list before it is finalised.