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U.S. treasury department takes strong stance against European Union blacklist

The United States Department of the Treasury took a strong stance against the European Union’s (EU) latest blacklist, comprised of countries the European Commission has decided are at high-risk for money laundering and participating in terrorist financing, with the Americans calling the list “flawed”, especially given that three U.S. territories are now named. The Bahamas also found itself on the EU’s list along with 22 other countries because of “strategic deficiencies in their anti-money laundering and countering the financing of terror (AML/CFT) regimes”.

The treasury department said it does not expect American financial institutions to pay heed to the list, or take into account the European Commission’s AML/CFT policies and procedures, despite this measure taken by the EU.

The U.S., in a press statement condemning the EU’s methods for developing the list, explained its reasons for considering the EU’s process list flawed: “The Financial Action Task Force (FATF) is the global standard-setting body for combating money laundering, terrorist financing, and proliferation financing. The FATF, which includes the United States, the European Commission, 15 EU member states, and 20 other jurisdictions, already develops a list of high-risk jurisdictions with AML/CFT deficiencies as part of a careful and comprehensive process.

“Because of the FATF’s work, virtually all countries around the world are subject to a rigorous peer-review methodology that examines the legal frameworks to counter illicit finance as well as how effectively jurisdictions implement them. These reviews are an intensive process involving careful review of the legal framework, extensive fact gathering, and on-site visits in which assessors engage in robust, iterative dialogues with assessed jurisdictions.

“The European Commission’s process for developing its list contrasts starkly with FATF’s thorough methodology.”

The U.S. said the European Commission firstly did not include a review in-depth enough to “conduct an assessment related to such a serious and consequential issue”; secondly, it did not provide the affected jurisdictions with a thorough basis for the blacklisting; thirdly, it did not give listed countries adequate forewarning of their status; and fourthly, it did not allow the listed jurisdictions to “challenge their inclusion or otherwise address issues identified by the commission”.

“As a result, the European Commission produced a list that diverges from the FATF list without reasonable support,” the U.S. Department of Treasury’s statement notes.

“Beyond our concerns with the listing methodology, the treasury department rejects the inclusion of American Samoa, Guam, Puerto Rico and the U.S. Virgin Islands on the list.

“The commitments and actions of the United States in implementing the FATF standards extend to all U.S. territories. The same AML/CFT legal framework that applies to the continental United States also generally applies to U.S. territories. Moreover, the treasury department was not provided any meaningful opportunity to discuss with the European Commission its basis for including the listed U.S. territories.”

The 23 blacklisted jurisdictions are Afghanistan, American Samoa, The Bahamas, Botswana, Democratic People’s Republic of Korea, Ethiopia, Ghana, Guam, Iran, Iraq, Libya, Nigeria, Pakistan, Panama, Puerto Rico, Samoa, Saudi Arabia, Sri Lanka, Syria, Trinidad and Tobago, Tunisia, U.S. Virgin Islands, and Yemen.

Chester Robards

Senior Business Reporter at The Nassau Guardian
Chester Robards rejoined The Nassau Guardian in November 2017 as a senior business reporter. He has covered myriad topics and events for The Nassau Guardian.
Education: Florida International University, BS in Journalism
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