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EU takes Saudi Arabia off Money Laundering Blacklist

EU governments have agreed to override a European Commission decision to put Saudi Arabia on a blacklist of countries tied to money laundering. The move, which was agreed unanimously, comes after King Salman warned it could lead to canceled contracts.

The Saudi monarch wrote to all 28 EU leaders arguing that blacklisting his country “will damage its reputation on the one hand and it will create difficulties in trade and investment flows between the Kingdom and the European Union on the other.”

The blacklist was first adopted by the EU Justice Commissioner Vera Jourova on Feb. 13 in line with new EU rules to prevent money laundering. Saudi Arabia was not the only state to express unhappiness with the proposal; Jourova also came under intense pressure from the US, which objected to the inclusion of its territories of American Samoa, U.S. Virgin Islands, Puerto Rico and Guam.

Carl Dolan, Director of Transparency International EU, told the Organized Crime and Corruption Reporting Project the decision to give in to Saudi Arabia was expected. “The UK, of course, has major business relations … Saudi Arabia is seen as a major partner in the war on terror,” he said

In its own communications, the EU said the blacklist was rejected because “it was not established in a transparent and resilient process that actively incentivizes affected countries to take decisive action while also respecting their right to be heard.”

The blacklist would have required EU banks to step up their vetting of deposits to root out criminal activities, much of which is thought to come ultimately from Russia, filtered through banks in Cyprus and the Baltic states.

Dolan said, “The amounts laundered through European banks is staggering…and none of that seems to have changed the minds of member states.”

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