Today, Commission Vice-President Valdis Dombrovskis presented the EU-Commission’s new action plan to fight money laundering and terrorist financing. The action plan is a consequence of the major money laundering scandals of the last years which were not prevented by the member states implementing EU anti-money laundering directives. With the action plan, the Commission responds to demands which Greens have been advocating for since a long time. In times of the corona crisis, where unprecedented amounts of public money have to be spent to support the economy, the fight against money laundering and financial crime becomes even more urgent. Currently only 1 percent of all laundered money is taken out of the hands of criminals according to Europol.
The action plan announces a coordination mechanism for national financial intelligence units (FIUs), EU supervision of obliged entities either through EBA or a dedicated EU body, tougher rules against cybercrime and a harmonised rule-book translating parts of the Anti-Money-Laundering Directive into a directly applicable regulation, among other things. The respective legislative proposals following the action plan are announced for the beginning of 2021.
In addition, the Commission presented its delegated act containing the list of countries with high risk of money laundering and its revised methodology for drawing up this list. The latter has only been marginally changed since the last version without taking on board the demands of the European Parliament. It still does not provide transparency about those countries which are given one year to adjust their legal framework before they are put on the list.
MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group and financial crime expert commented:
“The Commission finally undertakes bold steps to make the fight against money laundering truly European. In light of the corona crisis and rising public debt, we need a zero tolerance policy against money laundering and tax dumping more than ever. Due to the pandemic, fighting money laundering has become even more important. The EU can no longer accept that its internal market is abused for financial crime. Money laundering activities are to a large extent cross-border, therefore only decisive European action can stop it. I am personally delighted that the EU Commission has finally taken up many long lasting Green demands.
We need a European supervisor with direct powers over obliged entities and EU-wide regulation to effectively stop money laundering. Improving the governance of the EBA is of course needed but this does not make a banking authority a good supervisor against financial crime. Financial crime goes far beyond banking and should be tackled by a new agency with powers in all sectors of obliged entities.
In view of the blatant shortcomings in the national application of EU anti-money laundering rules, the Commission must urgently launch infringement proceedings against all Member States that fail to implement EU law effectively. Better coordination of national financial intelligence units is welcome, but in the long-run we need EU financial intelligence and a European financial police. The Commission should come forward with ambitious legislative proposals next year that allow effective actions against financial crime and close loopholes in existing legislation. Given the security risks posed by money laundering and terrorist financing, we can no longer allow companies to hide their ultimate beneficial owners behind strawmen.
It is a pity that the Commission has not responded to the European Parliament’s demand for transparency in the drawing up of the blacklist of countries with money laundering risks. Countries with identified weaknesses pose a threat to EU citizens and financial markets, already in the year before their listing, and should therefore be made transparent.”
Link to the action plan: ec.europa.eu/finance/docs/law/200507-anti-money-laundering-terrorism-financing-action-plan_en.pdf
My 10 point plan for the fight against money laundering: https://sven-giegold.de/wp-content/uploads/2020/02/Sven-Giegold-10-Key-Proposals-AML.pdf