26 Jul 2019
The European Commission on Wednesday called for new measures to prevent money laundering in the economic bloc, citing recent bank scandals and fragmented supervision of multinational financial institutions.
In four reports, the EU executive recommended improving coordination among national financial intelligence units, bolstering regulatory and supervisory standards for cross-border financial activity, and strengthening banks’ abilities to identify terrorist financing and creating an bloc-level platform to access central bank account registries.
The commission also advised nations to better address the money-laundering risks posed by fintech products, cryptocurrency exchanges, investment-linked citizenship programs, free ports and professional football, a sport which EU commissioners say has drawn investments of “questionable sums of money with no apparent or explicable financial return or gain.”
The publications follow headline-grabbing scandals at major banks in the bloc, which in the aggregate have been accused of processing hundreds of billions of euros in suspicious transactions for Russian organized crime groups and other criminals.
One of the four reports is intended to serve as a “post-mortem” analysis of suspected money laundering at ABLV Bank, Danske Bank, Nordea, Société Générale, Deutsche Bank, FBME Bank, Satabank, Versobank, Pilatus Bank and ING, according to the commission, which noted that that its reviews weren’t “holistic.”
“We have stringent anti-money laundering (AML) rules at EU level, but we need all member-states to implement these rules on the ground,” said Věra Jourová, the EU commissioner for justice, in a statement. “The recent scandals have shown that member-states should treat this as a matter of urgency.”
In its review of European bank scandals, the commission found that a number of the lenders did not show respect for, or “did not comply at all with, anti-money laundering requirements.” Financial authorities also varied widely in how they prioritized compliance failures and at times relied “excessively” on the AML supervision of neighboring host nations, the commission said.
“These deficiencies point to outstanding structural issues in the implementation of EU rules, which have been addressed only in part,” the commission said. “The regulatory and supervisory fragmentation, coupled with the diversity of tasks, powers and tools available to public authorities, create weaknesses in the implementation of EU rules.”
As such, EU leaders should consider imposing its bloc-wide AML directives as a regulation, “which would have the potential of setting a harmonised, directly applicable Union regulatory anti-money laundering framework,” according to the commission, which also called for “further development” to improve the cross-border sharing of AML data among supervisors.
“This may require conferring specific anti-money laundering supervisory tasks to a Union body,” the commission said.
The four reports are available below:
- Supranational risk assessment of the money laundering and terrorist financing risks affecting the Union
- Report assessing recent alleged money-laundering cases involving EU credit institutions
- Report assessing the framework for Financial Intelligence Units’ (FIUs) cooperation with third countries and obstacles and opportunities to enhance cooperation between Financial Intelligence Units within the EU
- Report assessing the conditions and the technical specifications and procedures for ensuring secure and efficient interconnection of central bank account registers and data retrieval system
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