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EU Council withdraws support for dirty money blacklist

By on March 8, 2019

After 27 of 28 EU countries objected, general EC secretariat said it ‘was not established in a transparent and resilient process’

(Screen capture of www.consilium.europa.eu)

Editor’s note: A version of the following was first published in the March 7 – 13, 2019, issue of Caribbean Business.

The executive director of the Fiscal Agency & Financial Advisory Authority of Puerto Rico (Aafaf by its Spanish acronym), Christian Sobrino Vega, and the commissioner of the Financial Institutions Office (OCIF in Spanish), George Joyner, reported that 27 of the 28 countries that comprise the European Union (EU) objected to finalizing the list of high-risk jurisdictions for money laundering, which includes Puerto Rico, and was recently published by the European Commission. The list included several U.S. territories, among them, Guam, Virgin Islands, Puerto Rico and American Samoa.

Immediately after its publication, the list was also rejected by the U.S. Department of the Treasury (UST) due to the lack of rigor in the methodology used by the European Commission in the preparation of the list.

Since its publication at the beginning of February, Puerto Rico government officials have rejected the island’s inclusion, arguing that the island currently has a robust legal and regulatory framework to prevent, detect and combat money laundering and other illegal financial practices. For their part, Aafaf and OCIF expressed they have been communicating and collaborating with the Office of Terrorist Financing & Financial Crimes (TFFC) at the UST.

According to Sobrino Vega, the Government of Puerto Rico has continued to work with the UST in relation to this matter. The executive director of Aafaf and Financial Institutions Commissioner Joyner thanked UST Secretary Steven Mnuchin and his team for supporting the Government of Puerto Rico. Additionally, Gordon Sondland, the U.S. ambassador to the European Union, said it was encouraging to see that common sense of the member states prevailed over the dogmatic posturing of the commission on the issue.


The consultation held Feb. 28 resulted in the required majority of EU delegations having declared their intention to object to the list, “in particular on the basis that the act was not established in a sufficiently transparent way,” according to the General Secretariat of the EU Council.

On March 1, following a Financial Attachés Working Party meeting, unanimity on the intention to object was reached and agreed that the Committee of Permanent Representatives invite the council to object, inform the EC and the European Parliament.

In a statement Thursday, the council said it needs “to introduce the list in an orderly process. Therefore, in order to establish a strong and effective instrument, the Council cannot support the current proposal that was not established in a transparent and resilient process that actively incentivises affected countries to take decisive action while also respecting their right to be heard.”

As previously reported by Caribbean Business, early this month, the former director of the Economic Development & Commerce Department (DDEC by its Spanish acronym), Alberto Bacó Bagué, rejected the recent decision to include Puerto Rico on the list of countries with deficiencies in their strategies against money laundering and to combat the financing of terrorist cells, and denounced the fact as an act of bad faith against a jurisdiction such as Puerto Rico, which is going through its most precarious economic period in the past 50 years.

“It’s unjustifiable. For me, that was a political move of very bad faith and we must fight to make them look ridiculous,” Bacó Bagué underlined during an interview with Caribbean Business, insisting that Puerto Rico “has an excellent commissioner of financial institutions, in addition to having a banking system that operates with the highest quality standards.”

Puerto Rico gov’t: European countries reject new inclusions in dirty money list

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