Europe proposes new institutions to tackle money laundering issues

19th July 2021 • News

According to a document read by The Wall Street Journal, the European Union will propose the creation of a new money laundering prevention agency with direct authority to oversee financial companies.

This agency will be part of a broader plan to address the failure that made the region a paradise for financial crime. According to someone familiar with the matter, the European Commission (EU legislative body) will make a proposal later this month.

This proposal is the EU’s most ambitious to date and is issued after several scandals have damaged its reputation. Repeated failures caused astonishment in Washington, where anti-financial criminal authorities often felt that the United States had to step into the void left by Europe.

A European Commission spokesperson did not immediately respond to a request for comment.

In 2018, the United States took advantage of its perspective on global dollar trading to effectively close ABLV, a Latvian bank that has become a paradise for dirty money. Washington notified European authorities of the imminent crackdown minutes before the announcement.

That same year, Danske Bank A / S, one of Denmark’s largest banks, said its small Estonian branch had moved more than $ 230 billion to Europe over the years from Russia and other former Soviet countries. I made it clear. Other cases occur in Sweden, Malta and Portugal.

In June, the European Court of Auditors, an independent EU auditing body, released a report accusing the authorities of being too late and inefficient. The European Banking Authority, which oversees money laundering, said it was not using it effectively. Meanwhile, the Commission said it was inefficient in monitoring changes in legislation between Member States and producing up-to-date statistics on this subject.

A spokeswoman for the European Banking Authority, based in Paris, the European regulator, has already addressed some of the issues raised by the Board of Audit and was only given new anti-money laundering authority last year. Said that.

The Commission’s plans will also force countries to apply uniform anti-money laundering rules. Currently, the EU’s Anti-Money Laundering Directive is unevenly described in national law, resulting in a patchwork of continent-wide law that opens the door to illegal transfer of funds through more relaxed countries. Work is occurring.

Implementation of the plan can take years. The new Money Laundering Prevention Agency will be established in 2024 and will be operational in early 2026, according to a proposal that requires approval by Member States and the European Parliament. Violations of the new agency’s law could result in fines of millions of euros.

Germany’s Greens EU MP Sven Giegold called the proposal a “major step forward for money laundering,” but the new rules would be irritating unless the Commission monitors countries that do not follow the rules. For example, he said the Commission has not filed infringement proceedings against countries that have not properly adopted existing money laundering directives.

“Europe is doing its best to determine new laws and new institutions, but forget to implement the rules that already exist,” Giegold said.

Karel Lannoo, CEO of the European Center for Policy Studies, a Brussels think tank, also warned that the new institution will not necessarily solve the much larger problem of weak control at the national level. For example, the Financial Intelligence Unit, the state agency responsible for investigating suspicious activity reports, lacks resources and staff in some countries.

“What we need is a bottom-up approach,” Lannoo said. “Member states must first organize their homes.”


Source: Texas News Today