Friday

20th May 2022

EU to create anti-money laundering agency

  • The Danske Bank affair, which emerged in 2018, was the largest in EU history (Photo: Jorge Láscar)

The EU is planning to create a new anti-money laundering watchdog in the wake of several bank scandals before the pandemic.

The Anti-Money Laundering Authority (AMLA), a new EU agency, will be the "centrepiece" of an updated regulatory system involving also national authorities, the European Commission said in a draft proposal, seen by the Reuters news agency.

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  • Top German lenders have also faced fiascoes (Photo: Bjoern Laczay)

"Money laundering, terrorist financing, and organised crime remain significant problems which should be addressed at Union level," the draft said.

The AMLA is to make operational decisions on risky companies.

"By directly supervising and taking decisions towards some of the riskiest cross-border financial sector obliged entities, the Authority will contribute directly to preventing incidents of money laundering/terrorist financing in the Union," the Commission proposal said.

It would also keep an eye on national regulators to make sure they do their job.

"It [the AMLA] will coordinate national supervisory authorities and assist them to increase their effectiveness in enforcing the single rulebook and ensuring homogenous and high quality supervisory standards, approaches and risk assessment methodologies," the Commission added.

The proposal said EU states will have to harmonise anti-money laundering laws for the project to work.

They would also need new to adopt fresh rules on disclosing the real owners of cryptocurrency assets, the Commission said.

"The lack of such rules leaves holders of crypto-assets exposed to money laundering and financing of terrorism risks, as flows of illicit money can be done through transfers of crypto-assets," it said.

The EU contains several weak jurisdictions, which act as entry points for illicit money into the European banking system.

These include Austria, the Baltic states, Cyprus, Luxembourg, and Malta.

But leading Dutch, German, Nordic, and Spanish banks have also faced money-laundering scandals in recent years, including the €200bn Danske Bank affair in 2018 - the biggest in EU history.

The European Banking Authority (EBA), an EU regulator in Paris, already has an anti-money laundering unit.

But this amounts to just 10 or so officials with no real authority, whose probe into the Danske Bank fiasco surprised many by uncovering no wrongdoing.

And the proposed AMLA would take over the EBA's functions in this area, the Commission draft seen by Reuters said.

The draft document is to be published on 20 July after final tweaks and the AMLA is due to be up and running by 2026, if member states agree.

Hungary turned into 'hybrid regime', MEPs say

The new draft European Parliament report is an update to the 2018 report which triggered the Article 7 procedure against Hungary, a sanctions probe aiming to rein in member states that break EU rules and values.

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