Europe

European Commission Investigates Past Money Laundering Cases

A European Union (EU) official has revealed that the European Commission (EC) is taking a close look into past money laundering cases at EU banks to determine if current rules need to be changed. The official told Reuters that the EC is reviewing cases between 2012 and 2018 in an effort to identify how banks fell short in preventing the crimes. It is also looking into cases of financial institutions (FIs) that collapsed after money laundering scandals, including Latvia’s ABLV and Malta’s Pilatus.

Deutsche Bank and Société Générale are also among the screened lenders. In 2017, Deutsche Bank was fined $425 million in the U.S. regarding a scandal that moved $10 billion out of Russia between 2011 and 2015, while Société Générale paid $95 million related to a dispute in the U.S. over violations of anti-money laundering regulations.

“We cannot, at this stage, disclose more on the scope or contents of the report,” an EC spokesman said.

In December, a plan to boost the region's defenses against money laundering was adopted, with certain measures agreed upon that need to be implemented by 2020. While the EU has primarily handed the supervision of anti-money laundering activities to national authorities, France and Italy are among the EU states that would like to see the creation of an agency to take over that responsibility. The move is backed by the European Central Bank (ECB), the International Monetary Fund (IMF) and the EU Parliament’s resolutions.

However, many states oppose making the change. In fact, when the European Banking Authority (EBA) recommended action against the Danish and Estonian supervisors earlier this year for oversight failures related to the Danske Bank money laundering scandal, regulators from other EU countries blocked it.

In a meeting this week, EU government representatives told the EBA to “improve its communication to avoid reputational risk for itself, and for the EU banking system,” the official said.

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