Thursday

2nd Apr 2020

Saudi Arabia evades EU dirty-money list for now

  • EU home affairs ministers to formalise the veto on Thursday (Photo: consilium.europa.eu)

EU states have rejected a European Commission proposal to blacklist Saudi Arabia and four US territories on money laundering and terrorist financing grounds.

All 28 member countries' ambassadors blocked the move at a meeting in Brussels on Wednesday (6 March) in an unusual step, an EU source said.

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  • US Virgin Islands - ambassadors' veto came after Saudi Arabia and US complained about the commission proposal (Photo: EUobserver)

The veto is to be formalised by EU justice and home affairs ministers on Thursday, forcing the commission to submit a new proposal later down the line.

The commission had called to add Saudi Arabia and the US territories of American Samoa, Guam, Puerto Rico, and the US Virgin Islands, as well as Panama, Libya, and some other countries, to what is known in the EU capital as the "dirty-money list".

But EU states complained about due process, saying the proposed new register had exceedingly loose legal criteria and that they had not been adequately consulted on its contents, the EU source noted.

"It was not about leaving off this or that country. It was disagreement on points of principle," the source said.

"The Council [member states] does not have the power to add or remove names from the list, only to approve or disapprove of the whole document," the source added.

The veto came after Saudi Arabia and the US had complained about the commission proposal.

The listing would have damaged "trade and investment flows between the kingdom and the European Union", Saudi Arabia's king Salman said in a letter to EU leaders.

The US ambassador to the EU, Gordon Sondland, also said last Friday, as objections began to surface, that it was "heartening to see common sense from the member states prevail over the commission's dogmatic posturing".

Vera Jourova, the Czech EU commissioner who drew up the failed proposal, had stood by her text on Tuesday.

"I personally gave a lot of commitments and promises to European people that we will efficiently fight against money-laundering and terrorist financing," she told MEPs in a committee hearing.

But Jourova herself had also voiced forebodings that her list would not pass prior to the ambassadors' veto on Wednesday.

"I did not ask the member states why they are opposing. I will ask the member states in the near future what shall we do together to achieve this goal," she told the MEPs.

The blacklist, which was first created in 2016, is not a sanctions register, but EU banks which do business with countries which are named and shamed must do higher levels of due diligence on financial transactions.

The back-and-forth on Saudi Arabia comes after it shocked Europe by ordering the murder of a journalist, Jamal Khashoggi, in Turkey last year.

Several EU states, led by Germany, imposed an arms embargo in response, but there was no EU-level or US reaction.

The oil kingdom has also tried to mend fences by sending diplomats to meet EU officials via the College of Bruges, an EU-funded academy in Belgium.

The existing dirty-money register, which includes countries such as Ethiopia, Iran, Iraq, North Korea, and Pakistan, is to remain in force pending the approval of another commission draft.

The fact that neither Azerbaijan nor Russia were included in Jourova's proposals meant she was not prepared to really crack down on corruption, campaigners noted in February, when her draft list first came out.

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