AML

EU Calls For Anti-Money Laundering Reforms

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European Union finance ministers on Thursday (Dec. 5) agreed on strategy for anti-money laundering (AML) reforms and countering the financing of terrorism, Reuters reported.

The European Council called for enhancements to AML rules and for the legislation to become national law. The EU also backed plans for “greater powers” to fight money laundering following disclosures that there were several incidences of dirty money passing through European banks.

Last year it was brought to light that €200 billion ($220 billion) in suspicious payments were made through Danske Bank’s Estonian branch from 2007 to 2015 in the EU’s largest money-laundering scandal to date. The latest incident involved Malta’s largest lender, Bank of Valletta.

In a joint statement, ministers urged the European Commission to consider the pros and cons of “conferring certain supervisory responsibilities and powers to an EU body.” They also asked for “more robust and effective cooperation” among AML authorities.

The EU’s AML effort is mostly handled by national authorities that do not always cooperate with each other. 

The finance ministers further asked if a European Union body “with an independent structure and direct powers” over banks should be considered, a move it was against last year.

Although the bloc adopted the fifth revision of its AML rules in May 2018, the ministers also urged an overhaul of the regulations. They pointed to recent enhancements to the AML regulatory framework — new capital requirements directive for banks (CRD5), the review of the functioning of the European Supervisory Authorities — as positive moves to strengthen the rules.

Last year’s reform was watered down by conflicting interests among EU states and quickly appeared insufficient as new scandals emerged.

Reuters said most ministers at Thursday’s meeting were in favor of reform but others, such as Luxembourg, did not participate.

The European Central Bank (ECB) said last month that Malta’s Bank of Valletta failed for years to detect or address thousands of payments that may have been involved in money laundering or other illegal activities. Last year, ECB slammed Malta for failing to enforce AML rules and failing to act on “serious breaches” at Pilatus Bank. 

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