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Europe is setting up a new financial regulator that will apply the rules against money laundering in the same way everywhere in Europe. The details of the sender and the beneficiary must also be known for transfers of crypto coins.
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Strict and sophisticated money laundering legislation in Europe and strong international cooperation have not prevented money laundering from remaining a serious problem in Europe. Valdis Dombrovskis, Vice-President of the European Commission and European Commissioner for Trade, announced a new European money laundering authority on Tuesday. This must guarantee that European rules are applied consistently and uniformly.
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Strict and sophisticated money laundering legislation in Europe and strong international cooperation have not prevented money laundering from remaining a serious problem in Europe.
Valdis Dombrovskis
Vice-President of the EU Commission for the Economy
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Various scandals, such as suspicious transactions by Danske Bank via an Estonian branch, have exposed the weaknesses of the European system in recent years. The current rules are governed by European legislation, but supervision remains largely national. Criminal organizations take advantage of those differences and find loopholes to pump illegal proceeds into the financial system and economy.
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According to the European police service Europol, suspicious money flows account for about 1 percent of the gross domestic product of the European Union, or about 130 billion euros. “The magnitude of the problem should not be underestimated,” warns Mairead McGuinness, EU Commissioner for Financial Services.
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The eye-catcher is the establishment of AMLA, a European authority against money laundering, with a staff of 250. The European money laundering watchdog will monitor the application of European rules from 2024 and coordinate the work of national authorities. AMLA has direct oversight over certain particularly risky financial institutions.
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Bank registers
Also very important is the new regulation that harmonises the rules of the beneficial owner, the due diligence requirements or ‘due diligence’. The powers of the financial intelligence services are being harmonised.
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The European Commission also wants to link existing national bank account registries and provide judicial authorities with access to this system. In addition, the new legislation tackles new challenges, such as cryptocurrencies.
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For example, transactions in cryptocurrencies, such as bitcoin, must be traceable: the name and beneficiary must identify themselves. This tracking prevents cryptocurrencies from being used to launder criminal money or finance terrorism. Anonymous bank accounts, but also anonymous wallets of crypto assets are prohibited.
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The proposals still have to pass through the hands of the European Parliament and the Member States. One of the difficult elements in that discussion will be the European ceiling on cash transactions. The Commission sets a ceiling of EUR 10,000. In one in three Member States, including Germany, Austria, Luxembourg and Cyprus, there is no limit.
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