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As a result of the risk posed by money laundering and terrorist financing, the European Union recently raised a red flag on four african countries -Botswana, Ghana, Mauritius and Zimbabwe. In a more aggressive approach, the EU now intends to create an arm to fight financial crime and control banks and other problems related to monetary transactions.
The 27-state commission believes it needs an efficient EU-level supervisor, who can largely address the financial loopholes that allow criminals to penetrate financial protocols.
“An integrated system must be established,” said the document released Thursday. However, the commission will first conduct a survey and evaluation of the possible impact that may come with the resolution.
In addition, the European body emphasized the creation of a research body that will have a unique position in the financial world instead of being overtaken by the European Banking Authority and other research offices.
“We need to end the dirty money that infiltrates our financial system. Today we are further strengthening our defenses to combat money laundering and terrorist financing, with a comprehensive and far-reaching Action Plan, ”said Valdis Dombrovskis, EU Executive Vice President of the European Commission.
African countries already on the blacklist are considering more serious consequences, such as the thorough investigation of financial transactions involving countries within European territory.
Already companies in blacklisted regions are prohibited from receiving EU funds.
The revised list will take effect from October 2020, a proactive measure that will involve African countries and financial institutions collaborating extensively to develop feasible ways to appeal for consideration and also maintain a friendly international relationship with the European organization.
On the positive side, Ethiopia and Tunisia were redeemed and blacklisted due to their significant achievement in the fight against money laundering and terrorist financing.
In the past 2 years, African nations have been consistent in the EU’s red flag region. This also indicates that the continent as a whole needs to combat the derogatory reputation of money laundering, dirty money bags and the location of the getaway.
That kind of derogatory image could hinder potential investors from other promising continents.
Another negative reputation to consider is the tax haven tag that Seychelles It was listed in February 2020. Mauricio was also blacklisted, but was removed in 2019.
The EU and its member states donate approximately € 20 billion annually to Africa in terms of development aid at the continental, regional and national levels.
