Today, Wednesday, the European Commission sent letters of formal notice to eight Member States that have not yet transposed the Fifth Anti-Money Laundering Directive into national law. The deadline for implementation was 10 January 2020 and in the absence of a satisfactory response from Cyprus, Hungary, the Netherlands, Portugal, Romania, Slovakia, Slovenia and Spain within two months, the European Commission may decide to issue reasoned opinions. After checking the completeness, the EU Commission will then in a second step check the correctness of the national laws. The biggest innovation of the Fifth Anti-Money Laundering Directive is the introduction of publicly accessible transparency registers for beneficial owners of companies. In Germany, the corresponding implementation law came into force on 1 January 2020. However, according to press reports, the problems of the German Financial Intelligence Unit (FIU) continue to exist.
Currently, infringement proceedings are still pending against 17 Member States regarding the Fourth Anti-Money Laundering Directive which was to be implemented by June 2017. The European Commission has commissioned the Council of Europe to carry out a review of the Fourth Anti-Money Laundering Directive which will last until at least mid 2021. The European Commission has discontinued the infringement proceedings of the Third Anti-Money Laundering Directive, which came into force in 2007, although the rules of the Third Directive were largely incorporated into the Fourth and Fifth Directives.
MEP Sven Giegold, financial and economic policy spokesperson of the Greens/EFA group commented:
“The EU Commission must take even stronger action if European governments fail to fulfil their obligations in the fight against financial crime. While it is welcome that the EU Commission is now initiating infringement proceedings, the problem lies deeper. For thirteen years now the rules on processing suspected money laundering have not been correctly applied in many member states. The EU Commission must initiate infringement proceedings against these severe shortcomings without further delay. Germany, too, is one of the sinners in the combat against money laundering. Since 2007, Germany has not managed to set up a functioning FIU. The prevention of money laundering in Germany is a disaster. The EU Commission must not only look at the details in national implementation laws, but must ensure the effective application of money laundering prevention. The principle of the rule of law demands that decisive action be taken against these persistent violations of Union law.
For Europe’s security, Dombrovskis must show more courage here than his rather passive predecessor Věra Jourová. It is not enough to simply check the implementation of European rules. When Commission officials look critically at the details in the implementation of the Fifth Anti-Money Laundering Directive, not a single case of money laundering or terrorist financing is prevented. The fact that the EU Commission has commissioned the Council of Europe to examine the correctness of the national laws implementing the Fourth Anti-Money Laundering Directive in all EU Member States shows how weak the EU Commission’s own resources are”.
February infringements package: key decisions taken by the European Commission:
Response of the European Commission of 12 December 2019 to the European Parliament resolution on the state of implementation of European anti-money laundering legislation: