The EU is in the final stages of launching a package of measures to shield the bloc from money laundering and terrorist financing at home and abroad, which each year is worth around €715bn to €1.87 trillion globally.
Until now, the competent authorities in each member state have been responsible for enforcement at the national level. But their success has not always been clear.
In 2022, “financial institutions have paid more than $5bn [€4.6bn] in fines for breaching current rules,” said a leading MEP from the Socialists & Democrats, Eero Heinäluoma.
And every day, the European citizen loses €5 to money laundering, according to Renew Group MEP Dragos Pislaru. “This means less money for proper healthcare services, less money spent for our education system, for infrastructure investments and all the measures that could improve our wellbeing.”
With a common European authority, “national authorities will no longer fall short on their responsibilities”, said Green MEP Damien Carême during a virtual press conference on Tuesday (March 28).
A pan-European authority (the Anti-Money Laundering Authority, AMLA) will be set up to monitor correct application of the rules, detect possible threats and demand countermeasures (also from third countries), while being able to impose sanctions against non-compliant entities.
Parliament’s proposal is that the new AMLA should have direct oversight of the 40 riskiest financially-obliged entities, which may include crypto-asset providers, and in the event that the competent national authority fails, AMLA should be able to extend its powers to other financial institutions.
In addition, with all the information collected, the authority will compile a centralised database to understand at a glance the risks of money laundering and terrorist financing across the EU.
The creation of this authority is one of three parts of the anti-money laundering package voted on Tuesday by the parliament’s economic and home affairs committees, which also includes a ‘single rulebook’ with due diligence and transparency obligations, and an update of the existing directive.
“Strengthening oversight and harmonising legislation are two simple tools to close loopholes in the existing rules,” said Carême.
To this end, parliament proposes extending the scope of these rules to NFT (non-fungible tokens) platforms, crypto-asset provider services, professional football clubs, or luxury traders.
These outfits would then be subject to due diligence processes and any suspicion of money laundering or terrorist financing by their clients should be reported to the competent authority for investigation.
Another way to avoid such loopholes, said the Green MEP, is to ban golden visas, which grant EU citizenship to foreigners who invest a “substantial” amount in an EU country.
In response to the limitations of existing rules, demonstrated during the imposition of sanctions on Russian oligarchs and other personalities connected to the invasion of Ukraine, mandatory registrations on beneficial ownership, bank accounts, land or real estate registers have been demanded.
Especially on assets worth more than €200,000. “We will also know who owns high-value assets such as yachts or private planes, and how the assets were purchased,” explained MEP Luděk Niedermayer (EPP).
The details of the final package will be agreed during the inter-institutional negotiations (the so-called ‘trilogues’), which are scheduled for May. Before that, parliament will still have to vote on Tuesday’s agreed position with the other MEPs at the April plenary session.