EU considers adding Russia to money laundering grey list

The European Union is weighing whether to add Russia to its grey list of countries with weak anti-money laundering controls, as EU lawmakers seek to step up financial pressure on Moscow over its war in Ukraine, according to The Financial Times.

Officials from the European Commission confirmed that the move is under consideration, following strong calls from Members of the European Parliament (MEPs), Caliber.Az cites.  

“There is huge support for putting Russia on the list,” said Markus Ferber, a German MEP who coordinates economic affairs for the centre-right European People’s Party.

However, no final decision has been made. A Commission spokesperson said the formal adoption of the updated list — initially expected this week — was delayed for “administrative/procedural reasons” and is now expected early next week.

Being placed on the grey list carries reputational consequences and imposes stricter compliance measures on financial institutions. Banks and other entities are required to carry out enhanced due diligence on transactions involving countries on the list, increasing the cost of doing business with them.

The EU’s grey list generally mirrors the one published by the Financial Action Task Force (FATF), an international watchdog focused on combating money laundering and terrorist financing. An earlier version of the draft list, obtained by The Financial Times, followed FATF’s latest guidance and proposed adding Algeria, Angola, Kenya, Ivory Coast, Laos, Lebanon, Monaco, Namibia, Nepal, and Venezuela. Meanwhile, it proposed removing Barbados, Gibraltar, Jamaica, Panama, Senegal, Uganda, and the United Arab Emirates (UAE).

Russia’s inclusion in FATF’s grey list is unlikely, as several member states are expected to block such a move. Although Russia’s FATF membership was suspended in 2023, its formal blacklisting would require consensus.

Ferber argued that Brussels should not rely solely on FATF. “[The Commission] should put their own work in. FATF just assesses the legal framework and not whether it is implemented. It is not enough for us,” he said.

The process has been further complicated by internal political disputes among EU lawmakers. The Commission’s attempt to align with FATF’s latest list failed last year, as the European Parliament rejected the proposal. Social democrat, green, and liberal MEPs opposed the removal of the UAE, while Spanish conservatives refused to delist Gibraltar — a British overseas territory claimed by Madrid.

“The socialists will not vote for the UAE and the conservatives will not vote for Gibraltar so there is no majority,” one parliamentary group official told The Financial Times. That impasse forced the Commission to postpone the list’s adoption.

Some EU officials believe adding Russia could help secure the necessary votes, since MEPs can only approve or reject the list as a whole and cannot amend it.

The UAE, currently negotiating a trade deal with the EU, has raised concerns that the money laundering issue could damage bilateral relations. EU Trade Commissioner Maroš Šefčovič formally launched talks during a recent visit to Abu Dhabi. The UAE has an 18-month window to conclude the agreement, intensifying pressure on Brussels.

Despite this, both Šefčovič and UAE officials insist that financial regulation is separate from trade. “Our commitment to anti-money laundering measures is ... strong, and is consistent with our efforts to develop regulatory frameworks in line with global best practice,” a UAE official said.

Spain, meanwhile, is leveraging the grey list designation of Gibraltar in broader post-Brexit negotiations with the UK. The territory was ceded to Britain in 1713, but Madrid maintains a sovereignty claim and is using the issue to retain leverage.

“I don’t think the Spanish will change their mind, especially with the Gibraltar-Brexit agreement still pending,” said a source close to the conservative People’s Party (PP).

The PP — part of the powerful European People’s Party — is essential to securing parliamentary approval for the updated list. Both the PP and EPP declined to comment on how they would vote.

By Sabina Mammadli