EU – Money laundering and Terrorist financing:Reinforced supervision for banks


Recent cases involving money laundering in some EU banks have raised concerns that anti money laundering rules are not always supervised. The EU stepping up the fight against illegal cash by enhancing monitoring of money laundering and terrorist financing threats at EU level.

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Reinforcing the role of the European Banking Authority (EBA)

The EU is stepping up the fight against illegal cash by enhancing monitoring of money laundering and terrorist financing threats at EU level.

EU ambassadors today agreed the Council’s negotiating position on a proposal reinforcing the role of the European Banking Authority (EBA) as regards risks posed to the financial sector by money laundering activities.

Money laundering and the financing of terrorism are major security concerns. The EU has a solid legal framework to clamp down on illegal cash flows but further efforts are needed to make sure that rules are implemented and monitored in a consistent way across the EU. The European Banking Authority has a crucial role to play in that regard.

Recent cases involving money laundering in some EU banks have raised concerns that anti money laundering (AML) rules are not always supervised and enforced effectively across the EU, creating risks for the integrity and reputation of the European financial sector, as well as for the financial stability of those banks.

Strengthening the role and powers of the EBA as regards anti-money laundering supervision for financial institutions would ensure that anti-money laundering rules are effectively applied in all member states and all authorities involved (in particular prudential and anti-money laundering supervisors) cooperate closely with each other.

According to the agreed text, the EBA would be given, in particular, the following tasks:

☛ collecting information from national competent authorities relating to weaknesses identified in the context of their action to prevent or fight money laundering and terrorist financing;

☛ enhancing the quality of supervision through the development of common standards and coordination among national supervisory authorities.

☛ performing risk assessments on competent authorities to evaluate their strategies and resources to address the most important emerging AML risks at EU level.

☛facilitating cooperation with non-EU countries on cross-border case.

☛as a last resort if national authorities do not act, the EBA would be able to address decisions directly to individual banks.

In parallel, the EU and its member states have engaged in a thorough review of existing practices for cooperation between anti-money laundering and prudential supervisors. On 4 December 2018, the Council adopted an action plan setting out short term non-legislative actions to better tackle AML challenges. In particular, the Council recommended that a “post-mortem” analysis of recent money laundering cases in EU banks would be carried out to understand how they came about and to help shape possible additional actions.

The European rules on anti money laundering and terrorist financing have been considerably strengthened in recent years, with two consecutive reforms being adopted since 2015. The latest revision of the AML directive, the fifth AMLD, was adopted in April 2018 and is due to be transposed at national level by January 2020.

The presidency of the Council will need to negotiate with the European Parliament to reach a final agreement before the new rules can be adopted and applied.

More information:

§ [Compromise text]

§ [Money laundering:action plan]

§ [Money laundering:Council webpage]

§ [Payments in the EU:increase transparency]

§ [New rules to clamp down on illicit trafficking in cultural goods]

§ [New rules on business insolvency]

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