(PHOTO CREDITS: Courtesy EURACTIV )
The question of tax avoidance and financial information exchange remains a sore point for EU-African relations, and the European Commission’s annual lists of ‘non-cooperative’ countries on tax and money laundering laws have done little to improve the situation.
Botswana, Ghana and Zimbabwe joined Mauritius in being publicly named and shamed by the European Commission in May on its EU list of high-risk third countries with deficiencies in their fight against money launderers and terrorism financing.
The Commission insists that the listing is for countries that “pose significant threats to the financial system of the Union” because of failings in tackling money laundering and terrorism financing.
Inclusion on the EU list means that banks and other financial institutions will need to conduct enhanced due diligence (EDD) measures in any transaction or business relationship with a person established in a high-risk third country. Meanwhile, companies located there are prohibited from receiving EU funds.
While Mauritius was warned at the start of the year that it faced being penalised because of its banks’ failure to tackle terrorist financing, several of the other countries were surprised by their listing.
The Ghanaian government complained that the listing “does not reflect Ghana’s anti-money laundering regime.”
The Commission’s country recommendations now have to be approved by the European Parliament in order to come into force in October.
Much of the frustration against the EU’s tactics is because the international rule-book on tax avoidance and money laundering is set by the Paris-based Organisation for Economic Co-operation and Development (OECD), a group of 35 wealthy nations which does not include a single African country.
