Grey list for Moscow: EU plans to make transactions with Russia more difficult

The European Commission is considering adding Russia to its "grey list" of countries with inadequate money laundering controls.

Source: Financial Times

Details: The decision could have been announced as early as this week, but the European Commission postponed its approval at the last minute for "administrative/procedural reasons". The document is expected to be updated early next week.

The addition of a country onto the list entails reputational losses and additional checks by financial institutions when processing transactions related to the relevant jurisdiction. This increases costs and complicates international cooperation.

Typically, the EU's grey list is based on the one compiled by the Financial Action Task Force (FATF), a global money laundering watchdog. Although Russia's membership in the FATF was suspended a year after its full-scale invasion of Ukraine, a number of countries are still blocking its inclusion on the FATF list itself.

The previous version of the EU list, seen by the FT, included Algeria, Angola, Kenya, Côte d'Ivoire, Laos, Lebanon, Monaco, Namibia, Nepal, and Venezuela. The exclusions of Barbados, Gibraltar, Jamaica, Panama, Senegal, Uganda and the UAE were also planned. However, the vote did not take place: the Social Democrats, Greens and Liberals opposed the exclusion of the UAE, and the Spanish conservatives opposed lifting oversight of Gibraltar.

MEPs say that the inclusion of Russia on the list could help to pass the document as a whole. The European Parliament can only support or reject the list in its entirety, without amendments.

Meanwhile, the UAE authorities say that the issue of money laundering should not affect trade negotiations with the EU, which began in May. Brussels is under pressure as the UAE has an 18-month deadline to complete the negotiations.

Spain, in turn, insists on keeping Gibraltar on the "grey list" to strengthen its position in negotiations with the UK over the territory's post-Brexit status.

Background: At the FATF’s meeting on 21-25 October, they upheld their decision to suspend Russia's membership in the organisation.

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