Debate: A comprehensive Union policy on preventing money laundering and terrorist financing – Commission's Action plan and other recent developments
Date: WEDNESDAY, 8 JULY 2020
Speaker: Valdis Dombrovskis
Language: EN

The Commission fully shares the European Parliament’s view that it is high time to create an effective enforcement policy in this field, where all the pieces fall together and where the roles of the private sector, and the competent authorities in the Member States and in the EU are clearly set out.  The Commission adopted an action plan on 7 May on a comprehensive policy to prevent money laundering and terrorist financing. This ambitious and multifaceted plan sets out measures that the Commission will undertake over the next 12 months to better enforce, supervise and coordinate the EU’s rules on combating money laundering and terrorist financing. Our aim is to shut down any remaining loopholes and remove any weak links in the existing EU rules. Any flow of money of dubious origin, any company created without a real business behind it, any offer from a suspicious investors to buy property – these all create opportunities for criminals and we must crack down on each and every one of them, wherever they are in Europe. Our first and most critical objective is to make sure that everyone in both the private and public sectors applies the relevant rules rigorously. The Commission is doing its bit. We have launched numerous infringement procedures to ensure full transposition and application of our two core directives, the Fourth Anti-Money Laundering Directive (AMLD 4) and AMLD 5. Since I took office in December, the Commission has referred three Member States to the Court of Justice for non—transposition of the Fourth Anti—money Laundering Directive. We have sent out three reasoned opinions for the incomplete transposition of the Fourth Directive, issued four letters of formal notice for non-conformity in the transposition of the Fourth Directive and 17 others for non—communication of measures under the Fifth Anti-money Laundering Directive. We have also closed nine cases for non—communication under the Fourth Anti-money Laundering Directive, recognising the important efforts undertaken in some Member States. AML rules must be effective. That is why Commission proposed in May to issue country—specific recommendations to 11 Member States in this area. The European Banking Authority now has additional powers and I expect it to use them in full. In terms of the next steps, I would like an EU AML supervisory body to conduct systematic on—site checks in Member States. We need to build up our preventive capacities. But we also need to go further and strengthen our rules and tackle remaining weaknesses.  Let me highlight some key issues. Cases of online money laundering are on the rise. Authorities in all Member States should have the powers to freeze suspicious transactions of this kind. However, we are also aware that the way rules are currently implemented is not optimal for legitimate businesses. Clearer and risk—based rules will avoid companies facing unexpected consequences due to divergences in the way rules are applied. Our rules should not make life harder for honest operators.  Honourable Members, the Commission fully concurs with you – national supervisors cannot supervise rules on their own. This has become abundantly clear from the string of scandals we have recently witnessed. Dirty money is highly mobile. If it is dealt with in one Member State, it moves to another one with weaker supervision and enforcement. Dirty money should have nowhere to hide. This is why we will have to establish EU—level supervision. An EU supervisory body would require direct supervisory powers over the riskiest financial institutions, with oversight for the non—financial sector. Different options for EU supervision are possible, as set out in our consultation. We may propose a new EU agency or add to the responsibilities of the European Banking Authority, depending on the feedback we get and on our own assessment. However, if the European Banking Authority is to become the EU supervisor, both its track record and governance will have to improve. Let’s be clear, an EU supervisor cannot effectively enforce AML rules in the EU unless additional flanking measures are in place, and they are critically needed in three directions. First, our work towards better preventing and fighting money laundering will be supported by the European Public Prosecutor’s Office, Europol and Eurojust, but also through better protection of whistle—blowers with a comprehensive new regime that Member States will need to transpose by the end of next year. Second, we will set up a mechanism to improve how suspicious flows of money are tackled and reported and better coordinate this analysis across Member States. We know that too much money laundering takes place across borders. Third, AML does not stop at the EU borders, so strong rules and enforcement in third countries is also essential. Not all countries, however, have strong regimes in place.  The new methodology issued alongside the action plan provides the EU with the necessary tools to take action. In this respect, I commend the positions taken by both the European Parliament and the Council with respect to the delegated act on the list of high—risk third countries, which recently entered into force.  To conclude, to effectively fight money laundering, we need to act in multiple directions. Let me assure you that the Commission is fully ready to play its part to ensure that our internal market and financial system are protected from criminals. The Commission thanks the European Parliament for steering as this debate towards a successful conclusion.