The European Commission has added Saudi Arabia to a blacklist of nations that are seen to pose a threat because of poor controls on terrorism financing and money laundering.
Panama, Nigeria and other jurisdictions were also added to the 23-country list, the EU executive said on Wednesday.
The move was criticised by some members of the bloc, including the UK, who were concerned about their economic ties to the newly-added countries, especially Saudi Arabia.
The black-listed nations join other jurisdictions, including Afghanistan, American Samoa, the Bahamas, Botswana, North Korea, Ethiopia, Ghana, Guam, Iran, Iraq, Libya, Pakistan, Puerto Rico, Samoa, Sri Lanka, Syria, Trinidad and Tobago, Tunisia, US Virgin Islands and Yemen.
As well as damage to the countries' reputations, being added to the list makes financial relations with the EU more complicated.
The bloc's banks carry out additional checks on payments that involve the 23 nations.
Previously only featuring 16 jurisdictions, the European Commission said it included the new additions for “strategic deficiencies in their anti-money laundering and countering terrorist financing regimes.”
Bosnia, Guyana, Laos, Uganda and Vanuatu were removed.
The Saudi government media office did not immediately respond to a Reuters request for comment.
Panama said it should not be on the list as it recently introduced more rigid rules concerning money laundering.