The European Commission on Tuesday added Lebanon to its updated list of high-risk jurisdictions with strategic deficiencies in their anti-money laundering and counter-terrorism financing frameworks, a move that could deal a blow to Beirut’s efforts to restore confidence among international partners.

In a statement, the Commission said Lebanon is among ten new countries added to the watchlist, alongside Algeria, Angola, Côte d’Ivoire, Kenya, Laos, Monaco, Namibia, Nepal, and Venezuela.

Financial institutions across the European Union are now required to apply enhanced due diligence when dealing with transactions or clients linked to these jurisdictions.

“These countries pose significant threats to the integrity of the EU financial system due to shortcomings in their anti-money laundering and counter-terrorism financing regimes,” the Commission said.

Lebanon has already been under increased international scrutiny since its inclusion on the Financial Action Task Force’s (FATF) “grey list” in 2023; a designation that flags nations under special monitoring for systemic weaknesses in combatting financial crime.

The European Commission stressed that its revised list aligns closely with FATF's recommendations and is based on extensive technical assessments, bilateral consultations, and on-site inspections.

“The update reiterates our strong commitment to global standards, particularly those set by the FATF,” said EU Commissioner for Financial Services Maria Luís Albuquerque.

The Commission also announced the removal of eight countries from the list — Barbados, Gibraltar, Jamaica, Panama, the Philippines, Senegal, Uganda, and the United Arab Emirates — citing improved compliance and enhanced oversight mechanisms in those jurisdictions.

The update was adopted under Article 9 of the EU’s Fourth Anti-Money Laundering Directive and will enter into force after review by the European Parliament and Council, a process that typically spans one to two months.

While the decision reflects the EU’s push to safeguard its financial system, it also underscores the significant hurdles facing Lebanon’s reform agenda. Being on the list means Lebanese entities will face tighter scrutiny in global financial markets, potentially complicating efforts to attract foreign investment and regain access to critical funding streams.