The European Commission has added seven countries including Saudi Arabia, Panama, and Nigeria to a blacklist of nations that pose a threat because of lax controls on terror financing and money laundering.
Prominent Putin critic Bill Browder said it was "remarkable" that Russian Federation had not been included following the $234bn (£181bn) Danske Bank money laundering scandal.
Inclusion on the list does not trigger sanctions, but apart from reputational damage, inclusion on the list complicates financial relations with the EU. They are anxious about their economic relations with the listed states, notably, Saudi Arabia.
The EU released its first ever blacklist a year ago in the wake of the Panama Papers leak, but was widely criticised for failing to apply its criteria to its own states which have some of the world's worst tax havens.
Its previous list contained 16 countries with US territories American Samoa, Guam, Puerto Rico and US Virgin Islands among those added.
The other listed countries are Afghanistan, North Korea, Ethiopia, Iran, Iraq, Pakistan, Sri Lanka, Syria, Trinidad and Tobago, Tunisia and Yemen.
The European Commission also added Saudi Arabia, Panama, and other jurisdictions to the blacklist, the EU executive said on Wednesday.
The proposal must now be approved by European Parliament and the 28 member states, with opposition from France and the United Kingdom against the new list.
"We have established the strongest anti-money laundering standards in the world, but we have to make sure that dirty money from other countries does not find its way to our financial system", EU Justice Commissioner Vera Jourova said in a statement.
She said it was urgent to act on the list because of the "risks spread like wildfire in the banking sector".
The list was compiled as part of a crackdown on money laundering and terror financing following several recent scandals, including some involving European Union banks. They could reject it by qualified majority.
Libya, Botswana, Ghana, Samoa and the Bahamas were also added, while Bosnia Herzegovina, Guyana, Laos, Uganda and Vanuatu were removed from the previous list revealed in July past year. "Dirty money is the lifeblood of organized crime and terrorism". Among the states that will be closely monitored are the United States and Russian Federation.