List of countries that use EU Banks for money laundering on a large scale

Yesterday the European Commission prepared a new list of high-risk countries that use the European Union's financial system to launder money and finance terrorism.: Panama, American Samoa, Bahamas, Botswana, North Korea, Ethiopia, Ghana, Guam, Iran, Iraq, Libya, Nigeria, Pakistan, Puerto Rico, Samoa, Saudi Arabia, Sri Lanka, Syria, Trinidad and Tobago, Tunisia, the US Virgin Islands and Yemen were included in a new list of "laundering" countries for the EU.

What does it mean for these countries to be in this list? Will they be sanctioned? The justice commissioner, Vera Jourová, made it very clear that the European Union will not sanction any country that appears in this list, it is simply a warning for the banks of the affected jurisdictions to take measures to confront this scourge.

The Justice Commissioner clarified that the significance of being on this list is simply to alert the European financial system to exhaustively examine the transactions coming from these countries. When any incoming or outgoing financial transaction takes place, the bank will require additional documentation to justify the legal origin of the funds.

Spain has been one of the 13 countries involved in including Panama in a list in high-risk countries. However, during last 5 years the Panamanian government of this offshore jurisdiction has made large investments restructuring its economy making it more sufficient to fight against money laundering accepting new laws that condemn prison sentences for tax evasion.

In its turn, the Panamanian government has demanded European Commission to eliminate it from the list of countries involved in money laundering on large scale due to a lack of justification. The authorities of Panama accuse EU of being blind to the great efforts that its country is making to adhere to international standards and cooperation against tax fraud.

From all the countries included in the list, Saudi Arabia is the most criticized one for its shortcomings in the fight against money laundering. According to the Finance Minister, Mohammed al Jadaan, Saudi Arabia will commit itself to a development of a strategy against money laundering and to adhere to the new regulatory frameworks established by the EU to combat illegal financing.

One of the aspects that has most caught our attention is that in the list of countries that use EU Banks for money laundering on a large scale the only jurisdictions that appear on the black list of tax havens for the EU are Panama, Bahamas, American Samoa, Trinidad and Tobago, Guam and Tunisia. As you can see, the pressure from the EU causes that many tax havens leave money laundering activities aside to become transparent tax free jurisdictions.

Countries that most launder money en European Union