Transparency International España
Transparency International EU (TI EU) and 14 chapters of Transparency International belonging to the EU, including TI-Spain, have jointly and coordinated request to the European Commission to strengthen the regulatory framework and adopt a more comprehensive approach and effective in the fight against money laundering, given the new challenges and risks present and in light of the Covid-19 crisis and the recent corruption scandals related to money laundering such as Cyprus Papers, Wirecard or Danske Bank.
TI-Spain supported, through technical advice, the proposal submitted by TI EU to the European Commission regarding the new regulation on money laundering and which is part of a new Action Plan for a global policy of the European Union on prevention of money laundering and financing of terrorism.
According to Transparency International, there is a high risk that national regulators, supervisory authorities and regulated entities relax their diligence measures and their approach to preventing and fighting money laundering in the mistaken belief that this can help rebuild ailing economies.
In summary, a series of recommendations have been drawn up in the following areas or categories: 1) ensure the effective implementation of the existing rules of the current regulatory framework 2) harmonize the fragmented legislative landscape in a Regulation and save divergent implementation among Member States 3) strengthen the current design of the supervision framework and the communication system between authorities for the sake of greater efficiency; 4) establish a suitable coordination and support mechanism for the financial intelligence units; 5) Strengthen the provisions of Community Criminal Law and information exchange; and 6) Strengthen the global role of the EU.
Likewise, the extension of the subjective scope is requested to other specific subjects who are currently executing business relationships with various obligated subjects and intervening in the risk chain in the prevention of money laundering, (for example, service providers in relation to golden visas, collective crowdfunding big platforms, etc).
In the same way, a serious and strict review has been requested sector by sector to detect the needs, challenges, particularities and risks of the same. Regarding the real estate sector, the second edition of the Supranational Risk Assessment recognized the risks related to this sector. The risks of abuse have increased significantly during and after the COVID19 crisis, where we have seen an increase in the number of requests concomitant with the obligation of the authorities in charge of reviewing requests to operate in unusual and restrictive conditions (working from home, etc.).
For example, in May 2020 Portugal raised 192.4 million euros through Golden Visas, its highest amount since March 2017. This more than five times the amount collected in April 2020 (28 million euros), with a 421% increase. And for its part, the Cypriot government has decided to speed up the processing of several final citizenship-by-investment applications amid the COVID19 pandemic.
The current EU legal framework and its minimum harmonization approach results in divergent implementation between Member States and the imposition of additional rules at the national level that creates distortions between sectors and between countries. So far, only 11 Member States of the EU have fully transposed the fifth EU directive against money laundering (AML) into their national legislation. The deadline for transposition ended on January 10, 2020.
More information: TI EU.