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European money laundering at risk blacklist SL among three States added

European money laundering at risk blacklist SL among three States added

Sri Lanka has been added to the European blacklist of countries thought to be at 'high risk' of money laundering and terrorist financing.

Despite intense efforts by some Members of the European Parliament (MEPs), at the plenary session on 7 February, they failed to achieve the 376-vote absolute majority needed to reject the inclusion of Tunisia, Sri Lanka, and Trinidad and Tobago to the European Commission's (EC) list of non-European Union (EU) countries considered to have strategic deficiencies in their anti-money laundering and terrorism financing regimes.

The vote on 7 February reflected the split in Parliament over the issue, with 357 votes in support of the motion, 283 votes against, and 26 abstentions.

The MEPs, who tabled the motion, focused their opposition on the inclusion of the North African country, which they believe the addition of which is undeserved; that it is a burgeoning democracy in need of support and that the listing fails to recognize the recent steps it has taken...... to strengthen its financial system against criminal activity. Sri Lanka and Trinidad and Tobago were included in the same delegated act.

As part of its obligations under the EU's Anti-Money Laundering Directive, the EC is periodically obliged to draw up a list of 'high-risk third countries'.

The European Parliament (EP) has veto power over the blacklist, which is one of the tools in the EU's armoury to protect its financial system against money laundering and terrorist financing. However, for many months, the list has been a source of disagreement between the EC and the EP.

The MEPs rejected the two previous versions, after disagreements over the methodology used by the EC for compiling the list. Since then, the two bodies have agreed on a new methodology, which will be introduced from the end of this year, for adding and removing countries.

In mid-December, 2017, in line with its custom of following the lead of the international Financial Action Task Force, the EC decided to include Sri Lanka and the other two States to its blacklist, sparking the present controversy.

(Ceylon Today)

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