EU Parliament Holds Firm on AML/CFT High-Risk List
Despite recent moves by the Financial Action Task Force (FATF) to adjust its assessments of various jurisdictions’ anti-money laundering (AML) and counter-financing of terrorism (CFT) frameworks, the European Parliament has voted decisively to keep the United Arab Emirates (UAE), Gibraltar, and Panama on its list of countries posing significant risks in these areas.
Last week, members of the European Parliament (MEPs) faced a proposal from the European Commission (EC) to remove the UAE, Gibraltar, and Panama from the high-risk AML/CFT list.
European Parliament’s Decision
However, with a resounding majority, 490 MEPs voted against the proposal. This vote signals a strong divergence in the perception of risk and the approach to international financial regulation between the European Union and international bodies like FATF.
FATF Recognition vs. European Decision
Gibraltar, recently removed from FATF’s grey list, has been acknowledged for its enhanced AML and CFT measures. The FATF’s decision was expected to ease some of the regulatory scrutiny on Gibraltar; however, the European Parliament’s vote to keep it on the high-risk list has sparked a debate on the alignment—or lack thereof—between different regulatory bodies.
The government of Gibraltar expressed its disappointment vehemently, stating, “The decision by the MEPs was deeply politicized, which undermines the technical assessments and progress recognized by the FATF.”
Political Dynamics and Technical Assessments
The clash between the FATF’s technical assessments and the European Parliament’s decision suggests a deeper political undercurrent. Some analysts suggest that the EU’s standards for removing a country from the high-risk list are increasingly stringent, reflecting a cautious approach towards financial crime in the wake of numerous global scandals.
The European stance appears to emphasize a broader set of criteria, potentially including political, governance, and corruption issues, which may not be as central in FATF evaluations.
