By Stanley Ugagbe
Four African countries recently made the news for the wrong reason as the European Commission has added them to a new list of countries that pose financial risks to the European Union due to anti-money laundering and terrorism financing shortfalls. The countries are Botswana, Ghana, Mauritius, and Zimbabwe.
Recall that Uganda was already on the list which now has a total of 22 countries.
Meanwhile, Ethiopia and Tunisia have been removed from the list owing to the progress they have made in tackling money laundering and terrorism financing.
In a statement, EU Executive Vice President of the European Commission Valdis Dombrovskis said the bloc was keen on putting “to an end to dirty money into our financial system”.
Valdis added, “Today, we are further bolstering our defenses to fight money laundering and terrorist financing, with a comprehensive and far-reaching Action Plan.”
The EU said all countries on the list with the exception of North Korea pledged to change their rules in order to address the problem.
According to the Commission, more needs to be done to contain the practice of money-laundering in those countries.
Also, the European Commission noted that it is looking into the possibility of creating a new authority to tackle financial crime and keep an eye on banks more strictly.
This development connotes that companies in any of the blacklisted countries are prohibited from receiving new funding from the European Union. The updated list is set to come into force in October this year.
According to EU law, banks and other financial and tax firms are obligated to inspect more closely their clients who have any dealings with countries on the list.
Meanwhile, Transparency International has called for urgent action during the COVID-19 pandemic which could lead to a marked increase in criminal activity involving cross-border financial flows.
The move elicited strong protests by Reserve Bank of Zimbabwe governor John Mangudya who said the accusations were not buttressed by any specific examples of the alleged terrorism funding.
