Banking News

New anti-money laundering authority on the table for Europe

New anti-money laundering authority on the table for Europe

(31 October 2019 – Europe) Following a series of high-profile money laundering scandals, the EU is exploring the creation of a central independent authority.

The bloc’s finance ministers are expected to formally mandate the European Commission to make recommendations on a new “independent” enforcement body with “direct powers,” according to a draft statement to be endorsed when they meet in December.

The body’s mission would be to police financial institutions’ compliance with EU rules on customer due diligence and other safeguards.

The proposal comes following a number of serious blows to Europe’s trust in its banking system’s defence against crime including the institutionalise money laundering at now-defunct Latvian bank ABLV as well as scandals that have plagued Dankse Bank’s Estonian branch, ING and Deutsche Bank.

France and the Netherlands, which is also seeking to toughen EU anti-money laundering rules, have said the best solution would be the creation of a new authority from scratch. But they fear it might take too long and have also suggested boosting the existing European Banking Authority, the pan-EU banking regulator, as an “alternative and quicker option.”

Deep governance reforms would be needed to make the EBA fit to take on a bigger role after being criticised for failing to use its existing powers to act on the recent scandals. Lawmakers have argued that the EBA rejected its own internal report highlighting failings in the supervising of Danske by Danish and Estonian regulators.

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