Friday

19th Aug 2022

EU tightens money laundering rules

  • EU wants to make it easier for police to seize criminal and terrorist assets (Photo: ukhomeoffice)

The European Commission is shoring up money laundering measures to regulate cash flows and freeze terrorist assets.

On Wednesday (21 December) it presented a host of bills to tighten cash controls, ease cross border police probes, and speed up asset freezes and confiscation orders.

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Finance commissioner Vladis Dombrovskis said in a statement part of the plan is to put "an end to criminals circumventing cash controls at the EU's external border".

The initiative is part of a larger "Security Union" package launched in April last year and spearheaded by EU commissioner Julian King.

King, along with EU migration commissioner Dimitris Avramopoulos, and justice commissioner Vera Jourova, told reporters in Brussels that the latest proposals will make it more difficult for terrorists and criminals to finance activities.

"As soon as we detect terrorist funds, we must stop them from being used, this has to happen fast," said Jourova.

Jourova said police and judicial authorities needed to cooperate better "and more intensely" in their efforts to fight terrorism in Europe.

She said a new regulation, presented on Wednesday, to confiscate and freeze assets, will speed up the process.

The EU already has a weaker 2014 directive on the matter, but says it is already outdated and riddled with loopholes.

Banks will now have 48 hours to freeze assets in accounts spread across Europe flagged as belonging to people aiming to use it for terrorist operations.

"This is a huge step in judicial cooperation," she said.

She said up to 98.9 percent of criminal profits are not seized and remain at the disposal of the people who carried out the crime.

"This has to be improved," she said.

A new standard form on confiscation orders will now be created to simplify the procedures.

She said the regulation will also close loopholes that prevent police from confiscating assets across borders if the "criminal is not convicted", for instance, should the terrorist or criminal die or escape.

"The current rules also don't allow the cross-border confiscation of people connected to the criminal or terrorist," she said.

Victims of terrorist attacks will also be more easily compensated.

A new second set rules on cash controls means money sent through the mail or by freight will now be subject to the same customs rules as amounts carried by people who leave and enter the EU.

People with at least €10,000 are already obliged to declare that sum with customs, but police are saying some manage to circumvent it by sending money through the mail. Others also ship gold, which is not considered to be "cash", to escape scrutiny.

The EU commission noted that French authorities had found non-declared gold and cash worth some €9.2 million in postal and freight packages during a 2015 probe at Roissy Airport.

The latest rules aim to close these loopholes.

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MEPs in the civil liberties and economic committees voted in favour of toughening up EU wide rules on tax evasion, as they gear up for institutional talks in March on the EU's anti-money laundering directive.

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