ECB Wants ‘Single Agency’ For AML Enforcement

Following scandals at European lenders, the European Central Bank (ECB) wants the European Union (EU) to step up enforcement of anti-money laundering (AML) rules. To that end, the bank recommends that the bloc make a “single agency” for the task as the ideal solution, the Financial Times reported.

Executive Board Member Benoît Coeuré said that ECB would “support any initiative that would lead to a more harmonized and also more coordinated approach” for enforcement of EU rules. In addition, the official noted that the region has “seen cases recently where AML issues have compromised the functioning and even the viability of some banks, so it is very important here to move forward.”

As of now, the central bank is tasked with looking over the compliance of banks to capital standards as well as other financial stability-related regulations. Monitoring money-laundering, however, is usually handled at the national level. At a meeting in Vienna, Coeuré said that the ideal solution was to make a “single agency,” but that “we are not asking to do it, we don’t think it should be part of our mandate.”

The news comes as financial crime is drawing scrutiny — and fines — at large financial institutions. To that end, ING Group said it has agreed to pay €775 million (US$900 million) to settle investigations by Dutch authorities over money laundering and other illicit activities.

Drilling down a bit, Bloomberg noted that the settlement is comprised of a €675 million fine. The remaining €100 million is a disgorgement. The investigations focused on ING’s failure to report unusual transactions in a timely manner, or failure to report them at all. The total settlement will be taken as a charge against third quarter results.

In its statement, ING said that it had uncovered “serious shortcomings” in its efforts to conduct customer due diligence at Dutch operations stemming from the period between 2010 to 2016.  The illegal activities came from what Bloomberg termed “unusual” payments made by VEON (formerly VimpelCom). VEON acknowledged the illegal activities and agreed to its own $795 million settlement with U.S. and Dutch authorities to a firm owned by an Uzbek official.