EU banks face money laundering action after Malta, Latvia cases
28 Jun 2018

European Union banks face an anti-money laundering crackdown before the end of the year following allegations of wrongdoing at two Latvian and Maltese lenders, top officials say.

The collapse of Latvia’s ABLV and the freezing of operations at Malta’s Pilatus Bank exposed shortfalls in recent reviews of anti-money laundering rules, which the 28-member EU is now trying to address.

Both banks were at the centre of money laundering allegations by U.S. authorities, which the head of euro zone banking supervision, Daniele Nouy, said revealed a “very embarrassing” weakness in European oversight.

“There is agreement on the importance of enhancing the current monitoring of the implementation of anti-money laundering measures,” Mario Centeno, head of the Eurogroup of euro zone finance ministers, said in a letter to the President of the European Council, Donald Tusk, before a summit on Friday.

He said a report on strengthening oversight will be prepared in July, paving the way for “further measures by end 2018”.

Newly-adopted anti-money laundering rules, set to enter into force by 2020, foresee the establishment in all EU countries of centralised bank account registers to gather financial data.

But cooperation among national forces to counter financial crime is still weak and has prevented enforcement measures, even in cases where there has been serious suspicion of wrongdoing.

Pilatus had long been a concern for euro zone supervisors, but Maltese authorities froze the bank’s assets only after its Iranian chairman was arrested in the United States in March on charges of money laundering and bank fraud.

Latvia’s ABLV has denied any wrongdoing, while Pilatus has not replied to several requests for comment from Reuters.

The two cases raised wider concerns over national oversight in smaller EU states.

The European Banking Authority (EBA) this month began a formal inquiry into how Maltese supervisors dealt with Pilatus after they failed to act for several months on its Azeri connections.

– By Francesco Guarascio, Reuters, 27 June 2018.


Link to Reuters.

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