Sven Giegold

Success: European Parliament calls for tough legislative changes after money laundering scandals

The European Parliament’s Economic and Monetary Affairs Committee voted this Tuesday on a comprehensive legislative package to reform European banking rules (CRD, CRR, BRRD). These include Green proposals to facilitate the fight against money laundering in the banking union and to ensure legal certainty in the event of the insolvency of institutions. Before the rules adopted by Parliament can enter into force, Member States must agree to them. In the forthcoming negotiations with the Council and the European Commission, we Greens will vigorously defend the measures agreed in Parliament in the area of anti-money laundering.


At the beginning of the year, several money laundering scandals of European financial institutions revealed that national anti-money laundering authorities in the European Member States did not provide the ECB’s supervisory arm with the necessary information on money laundering risks in individual credit institutions. The monitoring and enforcement of European anti-money laundering rules is formally the responsibility of the Member States and the EU Commission. However, the ECB has a duty to review directors and supervisory board members with regard to financial crime, to require additional capital from banks in the event of special risks and to withdraw their licenses in the event of serious money laundering offences. So far, the CRD does not even regulate the possibility of exchanging information on money laundering risks between bank supervisors and national anti-money laundering authorities. At the ECB’s request, the Socialist rapporteur Peter Simon, the Conservative Othmar Karas and Greens tabled an amendment to this effect, according to which the possibility of exchanging information is enshrined in the CRD by law. However, since this is obviously not enough to ensure effective cooperation in the banking union, we Greens also proposed making the exchange of information between bank supervisors and anti-money laundering authorities mandatory in both directions. Our proposal was approved by a large majority in committee.


The case of the Latvian ABLV Bank also revealed a shortcoming in the European Bank Recovery and Resolution Directive (BRRD). The ECB had classified the Latvian bank as “failing or likely to fail” due to massive refinancing difficulties as a result of accusations of money laundering. However, as the bank did not meet the requirements for insolvency proceedings under Latvian law at that time, the bank was in a limbo-like situation. In order to close this loophole, we Greens have tabled an amendment supported by a large majority of committee members. Member States must therefore adapt their national insolvency laws so that insolvency proceedings must automatically be initiated following a “failing or likely to fail” decision by the ECB.


MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group commented:


“The legislative changes demanded by Parliament are a step forward against money laundering in the European banking union. Since the ECB is depending on the decision of national anti-money laundering authorities to close a bank, national authorities must provide it with relevant information. National legislation on bank resolution and insolvencies must be further harmonised.


Despite the money laundering scandals such as ABLV, Dansk Bank and Versobank, the Council has not included a single line in its negotiating mandate to improve the fight against money laundering. However, we now need the necessary legislative amendments and cannot wait for the Commission to present a new legislative proposal. The banking rules are now under scrutiny and we must use this window to remedy serious shortcomings in the functioning of money laundering supervision in Europe. In order to defend the reputation of the banking union, I am calling on the Member States to support our proposals. We cannot afford another money laundering scandal. Irrespective of this, the ECB must become much more active against financial crime. It needs its own action programme and appropriate specialised staff”.






Position of the European Parliament, based on an ECB proposal submitted by the Greens, Othmar Karas and Peter Simon, to facilitate the exchange of information between bank supervisors and national anti-money laundering authorities in the CRD


In Article 56 CRD point (fa) new is added:


Article 56

Exchange of information between authorities


Article 53(1) and Article 54 shall not preclude the exchange of information between competent authorities within a Member State, between competent authorities in different Member States or between competent authorities and the following, in the discharge of their supervisory functions:

(fa)       competent authorities referred to in Article 48 of the amended Directive (EU) 2015/849 of the European Parliament and of the Council (Anti-Money Laundering Directive);



Position of the European Parliament, based on a proposal by the Greens, on the mandatory exchange of information between bank supervisors and national anti-money laundering authorities in the CRD


In Article 117 CRD, paragraph 4a new is inserted


Article 117

Cooperation obligations


(4a) Competent authorities, financial intelligence units and authorities entrusted with the public duty of supervising obliged entities listed in points (1) and (2) of Article 2 paragraph 1 of Directive (EU) 2015/849 for compliance with this Directive, shall cooperate closely with each other within their respective competences and shall provide one another with information relevant for this under this Directive, Regulation (EU) 575/2013 and under Directive (EU) 2015/849.



Position of the European Parliament, based on a proposal by the Greens, on the insertion of a new article on national insolvency proceedings in the European Directive on the recovery and resolution of institutions (BRRD)


Proposed new Article 32a BRRD


Article 32a (new)



Insolvency proceedings in respect of institutions not subject to resolution action

Member States shall ensure that national law governing normal insolvency proceedings provides that an institution which is failing or likely to fail under point (a) of Article 32(1) and for which, having regard to timing and other relevant circumstances, there is no reasonable prospect that any alternative private sector measures, including measures by an IPS, or supervisory action, including early intervention measures or the write down or conversion of relevant capital instruments in accordance with Article 59(2) taken in respect of the institution, would prevent the failure of the institution within a reasonable timeframe in the sense of point (b) of Article 32(1) but for which the resolution authority has determined that a resolution action is not in the public interest under point (c) of that paragraph shall be subject to normal insolvency proceedings.



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