Matthias Monroy

In the summer, the Commission presented a four-step legislative package against money laundering and terrorist financing. This includes the establishment of a new authority and the introduction of a bank account register. The proposals are currently being discussed by the Council, slowly now the consultation of the Parliament is starting.

At the beginning of next year, the European Union wants to establish a new Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA). It is expected to become operational in 2024 and fully operational two years later, supervising financial transactions of so-called „high-risk institutions“. A „harmonised risk assessment methodology“ will be used to determine which firms fall into this category. For this purpose, the authority also wants to evaluate reports from the member states.

More surveillance of customers‘ transactions by institutions

Before that, however, the EU governments must agree with the Parliament on a set of rules for such a money-laundering supervisory authority. In July, the Commission presented a proposal for a regulation to set it up. It is part of a comprehensive legislative package with further measures to combat money laundering and terrorist financing. This includes a renewal of the so-called Money Transfer Regulation of 2015, which is to include crypto assets in the future.

In addition, financial institutions are to be obliged to monitor more of their customers‘ financial transactions. These and other regulations on the mechanisms to be set up by the member states are to be adopted in a directive. It is also planned to introduce an EU-wide upper limit of 10,000 euros for large cash payments.

Europol had to hand over FIU.net

Where the money laundering supervisory authority will be based is still open. According to the plans, it will also take over FIU.net, which was located at Europol. This is an information exchange system of the „Financial Intelligence Units“ (FIU) from the member states.

The European Data Protection Supervisor had criticised the hosting of FIU.net by Europol because of the associated processing of personal data, as the police agency has no mandate to do so. Since last autumn, the network has therefore been temporarily attached to the Commission.

EU-wide register of bank accounts

Within the framework of the also new Money Laundering Directive, the Commission wants to establish and operate a central access point for bank account registers. This will enable FIU reporting offices to find out with one click whether a person has bank accounts in other member states. Until now, such queries had to be made individually in each country.

To connect to the networked system, all member states are to make their national bank account registers available via a central office. For the prevention, detection, investigation or prosecution of criminal acts, the authorities responsible for this should also have access. This would be possible for all „serious criminal offences“; the Commission has also submitted a proposal for a regulation on this.

It is foreseeable that Europol will be further strengthened with regard to financial investigations. Next year, the Commission wants to submit the proposal for another new directive on this, then the police agency should also be allowed to query the national bank account registers in its investigations.

New department at Europol

Even after the forced „handover“ of FIU.net, Europol remains responsible for financial investigations and has even been running its own department, the Financial and Economic Crime Centre (EFECC), for two years. Its task is to detect and investigate money laundering, fraud and currency counterfeiting, among other things.

Europol is also entrusted with the fight against terrorist financing within the framework of the SWIFT agreement. Since 2010, the agency has received traffic data of suspicious payments on the basis of an agreement between the EU and the United States. Together with the member states concerned, Europol can then carry out corresponding investigations, and the data is stored in a separate file at Europol for this purpose. According to the agency, this will significantly improve its ability to „map“ terrorist networks.

Sluggish treatment in the Council

It is still unclear how to avoid duplicating the work of the Money Laundering Authority, FIU.net and Europol in this respect, which is supposed to be regulated in the AMLA regulation as well. The Commission is causing further complications with its announcement that it wants to set up a network of investigators similar to the Financial Intelligence Units to combat terrorist financing. This was also the subject of a conference on financial crime and terrorist financing organised by the French Presidency in January.

The consultations on the four legislative proposals are progressing only slowly. For example, in order to finally refer the money transfer regulation to Parliament in April, the Council has again removed crypto assets. After referral to the relevant committees, the proposal could not be voted on in plenary before autumn. As things stand, it will take even longer for the other three proposals. The French Council Presidency is therefore giving priority to the planned money laundering supervisory authority. However, it is still unclear when the Council will agree on a position.

Image: EU Commission (YouTube).