Money laundering represents a serious problem for economy and security of all EU Member States. Several recent events have shown that fight against money laundering is far from over. Since this is a cross-border and a complex issue, a cooperative solution is needed. The European Union’s approach is based on the 5th Anti-Money Laundering Directive that is to be transposed by the members by beginning of 2020. Among others, this legislation aims to[1]:
Increase transparency about companies’ ownership.
Improve the work of Financial Intelligence Units (FIUs) with better access to information through centralised bank account registers.
Improve the cooperation between anti-money laundering supervisors and the European Central Bank.
Broaden the criteria for assessing high-risk third counties and ensure a common high level of safeguards for financial flows from such countries.
What has already been achieved?
In May 2015, the 4th Anti-Money Laundering (AML) Directive on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing was approved by the European Parliament and the Council of the EU.
Simultaneously, both institutions agreed to the Regulation (EU) 2015/847 on information accompanying transfers of funds. It was published in the Official Journal of the European Union on the same day as the 4th AML Directive, on 5 June 2015.
As the 4th AML Directive requires, on 26 June 2017, the Commission published its first Supranational Risk Assessment Report (it shall do so every other year or more often if necessary). In this report, the Commission is supposed to identify areas of the internal market at greatest risk, the risks associated with each relevant sector and the most widespread means used by criminals.
The 5th AML Directive was published on 19 June 2018. It amends the 4th AML Directive, keeping it also in force.
On 22 June 2018, the Methodology for identifying high-risk third countries was adopted.
On 26 March 2019, the European Parliament adopted the final report of the Special Committee on Financial Crimes, Tax Evasion and Tax Avoidance (TAX3), finalising the Committee’s yearlong investigation into financial crime and formulating some recommendations regarding future AML policies.
What is in the pipeline?
Even with the upcoming European elections and the new Commission taking over later this year, anti-money laundering policies are likely to stay among the priorities of European policy-makers. Here is what to expect in the near future:
Later this year, the Commission will publish the second Supranational Risk Assessment Report.
The Commission will also prepare the report on FIUs in EU Member States.
There is an 'ex post' review of the recent money laundering cases involving European banks planned by the European Commission.
A debate on the character of EU legislation against money laundering can be expected. There can either be a continual process with the Directive (next directive or amends to the current one), or a Regulation (or alternatively a combination of both) in attempt to increase the level of harmonisation between Member States of the EU.
[1] European Commission: Factsheet on the main changes of the 5th Anti-Money Laundering Directive. 9 July 2018.
