EU List of AML-Deficient Jurisdictions Includes U.S. Territories

The European Commission today issued its own list of 23 jurisdictions that it said have “strategic deficiencies” in their anti-money laundering and counter-terrorist financing frameworks. The list — developed separately from the list of 12 countries maintained by the international Financial Action Task Force, which is the globally recognized body for assessing AML/CFT standards — includes four U.S. territories: American Samoa, Guam, Puerto Rico and the U.S. Virgin Islands.

The Treasury Department immediately expressed its strong concern about the inclusion of U.S. territories on the list. “The commitments and actions of the United States in implementing the FATF standards extend to all U.S. territories,” the department said. “The same AML/CFT legal framework that applies to the continental United States also generally applies to U.S. territories.” Treasury emphasized that the European Commission’s process for identifying these jurisdictions was far less robust than FATF’s methodology.

The commission said its list was developed under stricter EU criteria that took effect last summer. While Treasury said that it “does not expect U.S. financial institutions to take the European Commission’s list into account in their AML/CFT policies and procedures,” the American Bankers Association is concerned that the EU list may pose difficulty for EU-based banks or U.S.-based banks with EU operations that operate in or have correspondent relationships with banks in the listed territories. The association will monitor the issue closely. For more information, contact ABA’s Rob Rowe.