EP unsure on MLD4 high risk list

On 9 January 2017, two Committees within the European Parliament, ECON and LIBE published a motion for a resolution (dated 13 December 2016) objecting to the proposed Delegated Regulation amending the European Commission’s list of high-risk third countries under MLD4.  The Commission says it has to identify high-risk countries exclusively on the grounds listed in Article 9(2) of MLD4, which relate only to AML and CTF deficiencies. The committees’ view is that the list of criteria in Article 9(2) is non-exhaustive and that predicate offences to money laundering, such as tax crimes, should be taken into account. The work of two special committees indicates that there may be AML/CTF deficiencies in some countries not included in the proposed list of high-risk third countries. Although tax evasion and money laundering do not always coincide, there is not an “absolute distinction” between non-cooperative tax jurisdictions and AML and CTF deficiencies, particularly in relation to requirements to report suspicious transactions. It notes the Commission’s list matches the FATF list, but says the Commission has the power and discretion to go beyond this. It also notes that rejection of the list would not invalidate the key principles of the legislation under which it would be made.  The Parliament is scheduled to vote on the motion in its 16 to 19 January 2017 plenary session.


Emma Radmore