While the newly elected Commission President Ursula von der Leyen is still busy with recruiting members for her college, the existing EU Commission outlined future priorities in the field of anti-money laundering (AML). The ne Communication ‘Towards a better implementation of the EU’s AML/CTF framework’ gives an overview of the four reports published this week and draws first conclusions: the supranational risk assessment report provides an update of sectoral risks associated with money laundering and terrorism financing. The assessment of recent high-profile money laundering cases in the financial sector, the Financial Intelligence Units and the interconnection of central bank account registries’ reports analyse the shortcomings in current AML supervision and cooperation, and identifies ways to address them.
Greens/EFA in the European Parliament have been driving the combat against money laundering in the EU forward for more than 5 years. After a series of money laundering scandals we have also found growing support in the Council and also by the German federal government. The EU executive body now suggests a more harmonised AML rulebook by replacing the EU Anti-money laundering Directive by a directly applicable Regulation, an EU Financial Intelligence Unit (FIU) coordinating the work of national FIUs, and an entirely new EU body in charge of AML supervision. Taken together, these measures are summing up to nothing less than a revolution to the insufficient AML framework currently applicable in the EU.
Based on the analysis of ten publicly known money laundering scandals involving EU banks in the period 2012-2018, the Commission concludes serious deficiencies by both credit institutions and national AML supervisors: “There does appear to have been an absence of a shared strategic aim of preventing money laundering across the multitude of institutional actors involved”. Likewise, the Commission warns that FIUs do not comply with their obligation to exchange information with other FIUs or national AML authorities. As requested by Greens/EFA, the Commission sees the strong need for improved cross-border cooperation and the interconnection of national centralised bank account registers.
Looking at Union-wide money laundering risks, the Commission lists three new sectors which Greens/EFA had already identified as highly vulnerable: professional football, freeports and investor citizenship and residence schemes (‘golden visas’). Likewise, the Commission shares the concerns of Greens/EFA towards self-regulatory bodies such as tax advisors, auditors, external accountants, notaries or real estate agents. Mauritius Leaks as the latest tax and money laundering scandal has proven again weak controls and reporting of suspicions by these intermediaries.
Sven Giegold, economic and financial spokesperson of the Greens/EFA said: “This is Summer music in my ears. This package brings great progress in the fight against dirty money in Europe. Effective money laundering controls are critical in the fight against organized crime. The Commission’s anamesis of the bad shape of the current EU AML framework as well as the suggested treatment plan are completely right. The Green/EFA Group in the European Parliament will urge the Commission to deliver the legislative actions needed to overhaul the EU combat against money laundering and terrorism financing. Meanwhile we will encourage the Commission to step up their treaty violation procedures so that existing legislation is actually applied fully.“