The European Commission (EC) published a plan to patch up gaps and fix weak points in the EU’s current anti-money laundering (AML) and combating the financing of terrorism (CFT) rules.
The Commission’s plan will be executed over the next 12 months, along with the launch of a public consultation on the subject, which will be open until the end of July.
EC’s executive vice president Valdis Dombrovskis said:
We need to put an end to dirty money infiltrating our financial system.
The EC plans to address the varying interpretations the European banks make of the AML and CTF with a “single EU rule book” to be unveiled in the first quarter of 2021.
The new plan will disrupt the current model of supervision, where member state monitors the implementation of EU rules individually. During the first quarter of next year, the EC will propose setting up an EU-level supervisor fix the weaknesses in a loopholes in the current model.
The EC calls for the European Banking Authority (EBA) to take advantage of the new model and take on AML and CTF. The new plan also suggests an “EU mechanism” to set up and support member states’ financial intelligence units (FIUs) to identify suspicious transactions and activities.
The Commission has also revealed a new methodology to identify high-risk third countries, paired with a new list of third countries with “strategic deficiencies” in AML and CFT rules. The new lists will have the European banks look more closely at clients from October. The countries on it include Bahamas, Barbados, Botswana, Cambodia, Ghana, Jamaica, Mauritius, Mongolia, Myanmar, Nicaragua, Panama and Zimbabwe. No longer listed are Bosnia-Herzegovina, Ethiopia, Guyana, Laos, Sri Lanka and Tunisia.
The plan also encourages member states to exchange information more freely between judicial, government and private authorities. There is also new guidance set to be announced on the role of public-private partnerships, however a date has not been fixed yet.
Chris Ives, senior manager at global risk consulting firm Kroll
The Commission’s new plans are a long time coming. Public-private partnerships are key to stakeholders working together to effectively tackle the problem.
Experienced writer and journalist, working in the global online trading sector, Steffy is the Editor of LeapRate. She has previous experience as a copywriter and has been with the company since January 2020. Steffy has a British and American Studies degree from St. Kliment Ochridski University in Sofia.