The EPP Group in the European Parliament wants the new European Anti-Money Laundering Authority to have more power over its national counterparts.
“It will be key that the new Anti-Money Laundering Authority will actually be in charge of all relevant institutions and will be truly independent from its national counterparts. The biggest risk is that we are adding just one additional layer of complexity and creating a new conflict of competences. To avoid that, it must be crystal clear that the new Authority firmly calls the shots for high-risk entities”, according Markus Ferber MEP, EPP Group Spokesman in Parliament’s Committee on Economic and Monetary Affairs.
“Even though the current EU anti-money laundering legislation focuses on the prevention, investigation and prosecution of money laundering, we still have some deficiencies to overcome. The uneven transposition of the current Anti-Money Laundering Directive on a national level is a case in point. We need better coordination between national Financial Intelligence Units. It is also time to enhance EU-level supervision”, said Emil Radev MEP, who is responsible for the topic in Parliament’s Committee on Civil Liberties, Justice and Home Affairs.
Both MEPs spoke ahead of the European Commission’s unveiling of a legislative package of anti-money laundering initiatives. The package also includes the proposal for the creation of a new EU authority to fight money laundering. The EU executive said that the aim of this package is to improve the detection of suspicious transactions and activities, and to close loopholes used by criminals to launder illicit proceeds or finance terrorist activities through the financial system. .
Ferber heavily criticised the loopholes in the current system. “So far, coordination is poor and the implementation varies a great degree between Member States. The plethora of loopholes and the poor enforcement make life far too easy for money launderers. The Commission is right to address this problem with an own dedicated EU agency, but the proposal is long overdue. We have seen that the European Banking Authority is simply not up to the task of fighting money laundering effectively”, Ferber stressed.
The new proposals were welcomed by the S&D Group in the European Parliament, saying that the new rules that will give teeth to the EU’s ability to enforce anti-money laundering laws and ensure that all EU countries apply the same rules. Jonás Fernández, S&D spokesperson for economic affairs, said: “The integrity of the EU’s financial system is at risk when it is only as strong as its weakest link. For too long a fragmented and badly coordinated system of national rules with varying degrees of enforcement has undermined our collective fight against money laundering. Today’s proposals are a step in the right direction and they answer our long standing calls for a single rulebook on anti-money laundering and counter-terrorist financing with uniform legislation overseen by an EU supervisor. The new proposals on crypto-assets in particular are a big step forward in a largely unregulated area. With rules making the transfer of virtual assets more transparent, we will be able to stop the crypto-currency market from becoming a hotbed for criminals to operate and profit from illicit money flows taking place in the shadows.”
A spokesperson for the liberals, also signaled the group’s commitment.
Europol has estimated that around 1% of the EU’s annual Gross Domestic Product is ‘detected as being involved in suspect financial activity’. The European Parliament has long called for such a move. Last year, the EP had passed a resolution calling the Commission to consider creating the EU coordination and support mechanism in the form of an EU FIU, to ensure that the responsibilities of the AML/CTF supervisor cover financial and non-financial obliged entities with direct supervision powers over certain obliged entities depending on their size or the risk they present, as well as supervision of the application of EU rules by national supervisors, a clear division of the respective powers of the EU and national supervisors and for the EU-level AML/CTF supervisor and EU FIU to be given budgetary and functional independence.
In order to address the current shortcomings, the proposed Authority will become a centrepiece of an integrated AML/CFT supervisory system, consisting of the Authority itself and the national authorities with an AML/CFT supervisory mandate. By directly supervising and taking decisions towards some of the riskiest cross-border financial sector obliged entities, the Authority will contribute directly to preventing money laundering and terrorism financing in the Union. This is being considered as crucial in consideration that all recent major money laundering cases reported in the EU had a cross-border dimension.
In its proposal, the Commission is proposing that the new Authority serves as a support and coordination hub assisting their work on, inter alia, joint analyses of Suspicious Transaction Reports and Suspicious Activity Reports with significant cross-border footprint, and providing stable hosting of the FIU.
The Maltese Dimension
Suspicious transactions have significantly increased in Malta. In 2020, according to the FIAU, a record number of 5,175 suspicious reports were filed by subject persons, while the Unit shared 4,535 intelligence reports with national, international competent authorities and counterpart FIUs. . The number of suspicious reports reflects a threefold increase since 2018, when the number stood at 1,679.
The agency imposed over €4.6 million in administrative penalties as it stepped up enforcement and supervision throughout the year. Following information provided by the FIAU, the Police prosecuted nine persons on charges of money laundering and tax evasion.