Debate: Fight against money laundering, following the FinCEN files
Date: THURSDAY, 8 OCTOBER 2020
Speaker: Dubravka Šuica
Language: EN

Dirty money is highly mobile. Time and again, we see criminals move it around the world with relative ease. Each new money-laundering revelation sparks more public anger. It erodes trust in our banks and financial institutions, in our authorities and our governments.  The FinCEN case we are discussing today confirms the Commission’s own reports and risk assessments from July 2019 that money laundering is a global challenge that demands a global response. If we are to succeed in fighting global cross-border crime, then we must all pull together and work with global partners, such as the United States, on closing loopholes. EU countries must also join forces to make the system less open to abuse. Member States acting alone are simply not up to the task of addressing a global challenge of such magnitude. The FinCEN files illustrate the vast scale of the problem. The European Union has to act decisively and collectively, with the European approach to supervision, a European approach to financial intelligence coordination. Dirty money should have nowhere to hide. Before the summer break on 8 July, the Commission outlined in this House the action plan for a comprehensive Union policy on preventing money laundering and terrorist financing, which the Commission adopted on 7 May 2020. It is now critical that we deliver on our action plan.  The FinCEN files are yet another illustration of why it is essential that financial institutions and other private sector entities detect suspicious financial flows and report their suspicions to the relevant authorities. They also highlight how important it is that national financial intelligence units have adequate tools and the capacity to process and analyse this information. These are all issues addressed in our action plan with a number of concrete actions proposed.  The Commission is also looking much more closely at how Member States implement the anti-money laundering directives so that our rules are effective on the ground. Enforcement is not only about ensuring the complete or correct transposition of the 4th and 5th Anti-Money Laundering Directives: enforcement is also about ensuring that anti-money laundering directives are effectively implemented.  The Commission recently sent questionnaires to some Member States. We will actively follow up on our findings. We will investigate ongoing problems and we will not hesitate to take legal steps if needed. There must be no divergences nor systematic weaknesses that could attract criminals. The European Union Supervisory System is only as strong as its weakest link.  We know that national supervisors cannot do this alone, which is why our action plan proposed EU-level supervision. For European Union supervision to work efficiently and seamlessly, we need an integrated system where national supervisors and the European Union Supervisor work effectively together, including by carrying out joint examinations here, and European Union anti-money laundering authorities would need to be equipped with significant and direct supervisory powers regarding the most risky obliged entities.  While the financial sector should be our initial priority, the European Union would need to progressively and significantly increase supervision of the non-financial sector. The anti-money laundering authority should also check that all national supervisors have adequate resources and powers to carry out their task. This could include on-site checks and would be the best way to monitor and make sure that the rules are applied effectively and consistently across the European Union.  The FinCEN case made it also clear that the increased number of reports submitted to the financial intelligence units puts pressure on their resources. We intend to put a coordination and support mechanism in place to support financial intelligence units in the European Union as a first step. This is vital for improving the detection of suspicious cash flows, especially those with a cross-border dimension, and for developing better analytical tools. Concretely we plan to support financial intelligence units in carrying out joint analyses, developing standards for reporting suspicious transactions, and providing IT assistance and support for exchanging financial information. The momentum to act decisively is with us. Everyone – authorities, stakeholders and citizens alike – expects the Union to act and ensure the stability and integrity of the Union’s financial system. We are grateful to this Parliament for setting the tone with its resolution last July. The time to act is now. We must close the door on dirty money decisively. The Commission is fully committed to presenting ambitious proposals in the first quarter of 2021 and counts on your full support.