After Barrow’s Speech, EU Defends Blacklisting High-Risk Third Countries
The European Union Ambassador to The Gambia has defended the EU’s decision of blacklisting 16 nations as high-risk third countries on anti-money laundering and terrorist financing.
The Gambia is not among the blacklisted countries. However, the Gambian president Adama Barrow described the EU’s publication of the list as ‘unilateral.’
The president was addressing the first virtual extraordinary inter-sessional summit of heads of state and government of the Organization of African, Caribbean and Pacific States (OACPS) on June 3rd.
He raised concerns over the struggling economic situation of member countries, stating it was needed to be assisted by development partners due to the havoc caused by COVID-19 pandemic.
“Unfortunately, we have noted with grave concern, the recent unilateral publication of the EU list of High Risk Third Countries on Anti-Money Laundering and Terrorist Financing, effective 1st October 2020,” he indicated in his virtual address.
“Such blacklisting will adversely affect the economic recovery strategies of many of our member countries in the wake of the COVID-19 pandemic and, further, impact on investments, financial aid and cross border financial transactions within our Organization. We, therefore, call upon the EU and other development partners to cooperate with our member countries, especially in these difficult times,” Barrow appealed.
The Chronicle contacted the EU mission in The Gambia regarding the concerns raised by the Gambian leader. Ambassador Attila LAJOS reiterated that the Gambia is not included among the high-risk third countries on the European Union’s Anti-Money Laundering and Countering Terrorist Financing (AML/CFT) list.
He also clarified that the inclusion in the list is not a punitive measure, and does not affect EU humanitarian assistance, EU development policy or the provision of grants, procurement or EU budget support to the affected countries.
What’s high-risk third countries all about?
Under the European Union’s 4th Anti-money Laundering Directive (4AMLD, Directive (EU) 2015/849 – ), the European Commission is mandated by its Member States to adopt a list of high-risk third countries which present strategic deficiencies in their anti-money laundering and/or countering the financing of terrorism (AML/CFT) policies.
“The purpose of this list is to protect the proper functioning of the EU financial system from any money laundering and terrorist financing risks resulting from those deficiencies,” Lajos tells The Chronicle.
“In practice, as a result of this risk-based approach, banks and other financial entities in the EU apply enhanced due diligence in case of financial flows to and from the countries identified in the EU list.”
A first list including 11 such countries was adopted in 2016, based on the assessment made by the Financial Action Task Force (FATF) – the international body charged with setting standards in this area.
“Since then, the Commission has been working towards a refined methodology that, among others, engages third countries on the basis of preliminary assessments and incentivizes them to implement corrective measures before a listing is considered,” he said.
According to him, based on this methodology, a number of countries having strategic deficiencies needed to be added to the EU list, and a number of countries that addressed their former deficiencies need to be delisted. “Therefore, the Commission amended its list on 7 May 2020.”
No connection with COVID-19
“The inclusion of a county in the list is not in any way related to the EU’s partnership with any country in the wake of the COVID-19 pandemic, nor does it affect its relationship with the EU in terms of humanitarian or development assistance.
He emphasizes that it does not affect the EU’s partnership with affected countries in fighting the pandemic.
According to the EU Directive concerned, banks and other financial gatekeepers are required to apply enhanced vigilance in financial transactions involving listed countries.
“This is in line with international obligations and standards set by the FATF. Those enhanced measures lead to extra checks and monitoring of those transactions by banks and obliged entities in order to prevent, detect and disrupt suspicious transactions.
“These measures do not entail any type of sanctions, restrictions to trade relations or impediment to development aid; but it aims to apply enhanced vigilance measures in those cases,” ambassador Lajos says.
“The European Union wishes to shield its financial system from those flows.”
The sixteen countries that are identified as having strategic deficiencies in their national anti-money laundering and counter-financing of terrorism regimes that pose significant threats to the EU’s financial system are Afghanistan, Bosnia and Herzegovina, Guyana, Iraq, Lao PDR, Syria, Uganda, Vanuatu, Yemen, Ethiopia, Sri Lanka, Trinidad and Tobago, Tunisia, Pakistan, Iran – seeking technical assistance in the implementation of the FATF Action Plan and Democratic People’s Republic of Korea – has repeatedly failed to address deficiencies.