By Elizabeth Hearst
The European Union has added three African nations to the list of “high risk third countries” in terms of money laundering and terror funding activities.
Zimbabwe, Botswana and Ghana join Mauritius on the list of countries with “strategic deficiencies in their anti-money laundering and countering terrorist financing regimes that pose significant threats” to the EU, according to the Financial Times.
The countries are described as posing a “significant risk to the financial system of the EU”, due to their failings to tackle money laundering and terrorism financing in their countires.
Although “high-risk” does not prevent investment in these countries, it will require European banks to investigate their customers with ties to these markets with more scrutiny.
Mauritius inclusion of this list highlights the country’s establishment as a financial centre which benefits from international double taxation treaties and a low-tax regime. Furthermore, after an extensive investigation was published by the International Consortium of Investigative Journalists, the Mauritian government was accused of “facilitating tax avoidance”, of which it denies.
The Ghanian government has hit back at their inclusion in this list, declaring that this listing “did not reflect Ghana’s anti-money laundering regime”.
Similarly the included African countries have slammed the EU directive and have argued that the EU’s strategy follows the international blueprint of the OECD and their 35 wealthy economic members, of which no African country is a member.
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