Debate: Increased efforts to fight money laundering
Date: WEDNESDAY, 20 OCTOBER 2021
Speaker: Mairead McGuinness
Language: EN

This package should be seen in the context of a comprehensive AML/CFT policy at Union level. Enforcement is a key element of that comprehensive policy. Effective implementation of the existing AML rules is at the very core of our approach to fighting money laundering. And over the years since the first AML Directive in 1991, the EU has been reinforcing its anti-money laundering rules. These rules are now amongst the toughest in the world and will be further strengthened once the July 2021 AML package is adopted.  But they will only be effective if they are enforced equally across the board. This is confirmed by the work carried out by this Parliament through the Panama Papers Inquiry Committee and the TAX3 Special Committee. This was also confirmed by the debate that this House had a fortnight ago about the Pandora Papers. In the European Union, we need to ensure that beneficial ownership registers are up and running and fully populated. We will use our enforcement powers under the Treaty to that end, and we will work in international forums to make sure that other jurisdictions will follow suit by bringing about full transparency of beneficial ownership.  Honourable members, we share the same ambition: effective implementation, one of the pillars of our AML policy, must remain at the centre of all our actions. Our enforcement approach to AML is based on several tools available to the Commission.  First, a thorough control of transposition. We are determined that our existing rules on AML are fully implemented, even as we negotiate the new proposals. And let me be very clear: existing legislation must be fully and correctly transposed and applied on the ground in our Member States.  On the fourth Anti-Money Laundering Directive (AMLD4), we started with infringement procedures against all Member States for incomplete or incorrect transposition. Today, there are three ongoing non-conformity cases – all of them at the stage of letters of formal notice.  On the fifth Anti-Money Laundering Directive (AMLD5), the Commission sent letters of formal notice to 16 Member States on the grounds of partial or non-transposition. Five Member States have reached the stage of reasoned opinion. One letter of formal notice has already been sent for incorrect transposition. More letters are likely to follow in the coming months as we complete conformity checks.  Transposing AMLD4 and AMLD5 was a very difficult process for Member States. We in the Commission supported the efforts of Member States by cooperating with them, while in parallel launching formal infringement proceedings.  The special report of the European Court of Auditors on AML identified the limited resources the Commission has to carry out transposition checks. But I want to say that even with those limited resources – and I assure you of this – we are doing our utmost to implement the recommendations in the report and to ensure that AMLD is fully and correctly transposed.  A second tool available to us is to ensure effective implementation of the AML Directive, and this involves a proactive look at the state of play of application of the rules as transposed in the national laws of Member States. The Council of Europe is conducting a study on the effective implementation of the AML framework in each Member State, including on—site visits to all Member States and looking at core provisions of our rules, for example, whether supervisors and financial intelligence units are sufficiently staffed; the functioning of registers of beneficial ownership, and how the supervision of the non-financial sector is carried out. Another tool we use are country-specific recommendations (CSRs) within the European Semester. Here, the Commission issued 11 AML-related CSRs last year, and we plan to make greater use of the semester for AML in the next cycle. This year, most Member States that have received CSRs have included AML in the Recovery and Resilience Plans. Next Generation EU provides further leverage for monitoring progress in Member States. Where measures on AML have been included in Member States’ plans, their implementation will be monitored through milestones and targets.  The European Banking Authority (EBA) also has powers in the field of anti-money laundering, particularly in relation to investigating whether a national supervisor has breached Union law when carrying out its tasks. We expect the EBA to make full use of its powers. In addition to national competent authorities, it is important to involve civil society. The Commission is currently implementing a pilot project requested by Parliament called ‘Capacity building, programmatic development and communication in the context of the fight against money laundering and financial crimes’. This is aimed at increasing AML awareness and empowering civil society in this area.  The proposals presented in our 20 July AML package will strengthen the current framework. Under the new AML Regulation, obliged entities will be subject to directly applicable rules. In particular, the AML Regulation provides for harmonised requirements for consumer due diligence, and such requirements are more detailed and granular than at present and will be further refined via implementing legislation prepared by the future EU AML authority. The single rulebook will also further specify our rules on beneficial ownership, to improve our knowledge of who is behind a transaction and to exercise its control over a company or legal arrangement or entity. These new rules will clarify the concept of control and increase the powers of registers to get accurate information.  We fully share the findings of the European Court of Auditors, which viewed the AML package as an opportunity for the Commission and the co—legislators to remedy the fragmentation of the EU AML framework. For enforcement to be as efficient and effective as possible, we urgently need an AML single rulebook. With this new legislative package, the Commission has fully delivered on this recommendation from the European Court of Auditors. A new EU supervisory authority, the EU AML Authority (AMLA), will have a key role in ensuring that all national authorities effectively implement the single rulebook. In order to best prepare the ground for the new authority, in particular with respect to the supervision of the non-financial sector and the functioning of financial intelligence units (FIUs), Member States need to make tangible headway in efficiently implementing the AML framework. With this in mind, we will follow up on the findings of the Council of Europe report.  AMLA, the new authority, will also have the possibility to conclude working arrangements with the European Anti-Fraud Office (OLAF), Europol, Eurojust and the European Public Prosecutor’s Office to ensure good cooperation of all actors, as it is critical to bridge the gaps between the preventative and repressive strands of the EU AML framework.  As regards the law enforcement angle, the fight against criminal finances will play a prominent role under the new European multidisciplinary platform against criminal threats (EMPACT) 2021-2025 initiative, the flagship instrument for cooperation among Member States, agencies and EU bodies to fight organised crime.  The creation of the European Financial and Economic Crime Centre at Europol in June 2020 is a significant step to reinforce law enforcement efforts against financial crimes. We will bolster these efforts by supporting operational cooperation at the Anti-Money Laundering Operational Network (AMON) of money laundering investigators and by proposing, next year, stronger rules on asset recovery and confiscation to ensure that crime does not pay.  AML is an area where the smooth exchange of information is crucial. One of the priorities of the Commission in this area was to take over the management of the FIU.net system, pending its transfer to AMLA in the future, and I am happy to confirm to the House that that transfer has now been successfully completed. We expect the new authority to be established in 2023 and to start its activities in 2024. The direct supervision of certain high-risk financial entities will only begin in 2026, which is when AMLA will reach its full staffing.  Until then, our commitment to fighting money laundering, by all possible means, remains strong and unchanged, and I’m happy to count on this House’s continued support on this very important issue. Thank you, colleagues, for your engagement. I look forward to hearing your views.