The European Commission’s first attempt at a money-laundering blacklist collapsed in February. Twenty-seven of twenty-eight EU member states rejected it. Washington called it politically motivated. Saudi Arabia leaned hard on European capitals. The list named Saudi Arabia, plus four US territories: Guam, the US Virgin Islands, American Samoa, and Puerto Rico. None of those territories appeared on the Financial Action Task Force’s own list — the global standard-setter. The mismatch was fatal.
Now Brussels is trying again. Justice Commissioner Vera Jourova told the Financial Times the new list will come in October 2019. It will use a different methodology, worked out with member states. Jourova admitted the first list was a mistake. “The problem with the first list was that it was one size fits all but not all states are at comparable levels of risk,” she said. She also said the commission should have talked to blacklisted countries before publishing their names.
The stakes here are concrete. The blacklist is not symbolic. Countries placed on it face stricter checks on financial flows into the EU. Banks and other financial institutions must apply enhanced due diligence on transactions involving listed jurisdictions. That means higher costs, slower processing, and reputational damage for the countries named. For a place like Saudi Arabia, the world’s largest oil exporter, the practical effect could ripple through global finance. For small US territories like American Samoa, the impact is disproportionate — tiny economies hit with a label that signals risk.
The original list named 23 jurisdictions. The new one will likely be shorter. Jourova said experts are working on how to address the criticism. A “grey list” is under discussion — a tiered approach that would put countries on notice before a full blacklisting. That would be a softer step, but also a clearer warning. The Financial Action Task Force already uses a grey list. The EU’s previous list ignored that structure. That is what drew fire from Britain, Germany, and France. They said the process was not “transparent and credible.”
What is at risk now is the EU’s credibility as a rule-setter on financial crime. If the second list also draws political backlash, the whole exercise weakens. Money laundering is a real problem. The EU estimates hundreds of billions of euros are laundered through its financial system each year. A blacklist that cannot survive political pressure is worse than no list at all — it signals that the rules bend when powerful countries object. Saudi Arabia showed that in February. Washington showed it too.
The new methodology is meant to fix that. But the process is still political. Member states helped design it. That means the new list will reflect compromises. It may exclude countries that should be included. It may include countries that are not the worst offenders. Jourova acknowledged the commission should have communicated earlier with blacklisted states. That is a procedural fix. It does not solve the underlying tension: a blacklist is supposed to be objective, but the countries being judged have leverage.
October is the target. By then, the commission will have to decide whether the new approach holds. If it does not, the EU will have lost a second round. And the money launderers will have won again.
