Four African countries have been added to a new list of countries that pose financial risks to the European Union by the European Commission due to anti-money laundering and terrorism financing shortfalls.
The countries are Botswana, Ghana, Mauritius and Zimbabwe. The list which now has a total of 22 countries already included Uganda. According to the EU, all countries on the list with the exception of North Korea, pledged to alter their processes in order to address the problem.
The European Commission on Thursday, announced that it is looking into the possibility of creating a new authority to tackle financial crime and keep an eye on banks more strictly.
According to EU Executive Vice President of the European Commission, Valdis Dombrovskis, “We need to put an end to dirty money infiltrating our financial system. Today we are further bolstering our defences to fight money laundering and terrorist financing, with a comprehensive and far-reaching Action Plan”.
The addition of these countries means a prohibition of European Union funding for companies in any of them. The updated list is set to come into force in October this year.
Banks and other financial and tax firms are obligated to inspect clients who have any dealings with countries on the list, more closely in accordance with EU law.
Meanwhile, Ethiopia and Tunisia have been removed from the list owing to progress they have made in tackling money laundering and terrorism financing.
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 flow.
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