The money laundering scandals in the banking sector in the euro zone are accumulating. Yesterday, the European Central Bank (ECB) withdrew the licence from the Estonian Versobank because of serious breaches of anti-money laundering rules. Only a month ago, the Latvian ABLV Bank was closed after allegations of money laundering following warnings by US authorities. The Maltese banking supervisor only took action against the Maltese Pilatus Bank after sanctions were imposed in the US. The money laundering problems of Danske Bank in Estonia remained without consequences for years.
The monitoring and enforcement of European anti-money laundering rules are formally the responsibilities of the Member States and the EU Commission. However, the ECB has a duty to review directors’ and supervisory board members’ suitability with regard to financial crime, to demand capital add-ons from banks if latent risks are detected and to withdraw their licenses in the event of serious money laundering offenses.
MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group commented:
“We have to protect the reputation of the Banking Union and finally clean up with money laundering across Europe. The ECB can no longer hide behind national anti-money laundering supervisors. The business models of all banks in the euro zone must be systematically checked for risks stemming from financial crime. The ECB already has the competence to do so. We are asking the ECB to draw up an action plan against financial crime fully exploiting its legal competences.
The EU Commission must check whether the anti-money laundering authorities of the Member States have fulfilled their obligation to prevent money laundering and, where necessary, initiate infringement proceedings. It has never been a secret that Malta, Cyprus and Baltic States have massive problems with money laundering. Finally, the Commission has to act.
It is unacceptable that the ECB depends on the decision of national anti-money laundering authorities to close a bank. It is equally embarrassing that the United States must act as Europe’s par-default money laundering supervisor. In a Banking Union we need the competence to monitor and enforce European anti-money laundering rules at EU level.”