Los Estados miembros urgen tener normas armonizadas frente al blanqueo
Jorge Valero for “El Economista”
Europe is unable to tackle the enormous problem it has with money laundering within its borders. Despite having carried out five revisions to its directive against money laundering and terrorist financing, the single market continues to be a drain for money flows from dubious origins. The latest directive came into effect this year. Some countries have not even completed the fourth review. But the main problem is not the procrastination of the governments, but rather that the national authorities leave many holes in a battle that is generally transnational, and no supervisor wants to get into the neighbor’s taifa.
The cascade of scandals in recent years has pushed the EU to grapple with the source of the problem. He wants to create a new European authority, with powers to intervene in the member states, and more harmonized rules, according to a draft of conclusions to which El Economista had access, and which will be adopted by the EU finance ministers next Wednesday at the Ecofin Council.
Community sources reported that Ecofin has become an informal video conference, given the increase in COVID cases in Europe. Ministers are expected to give their political blessing to the conclusions, and the document will be subsequently adopted by written procedure.
Scandals such as Danske Bank in 2018, which through its branch in Estonia introduced 200,000 million euros of suspicious origin into legal circulation, have been the last straw. But the money laundering challenge transcends European borders, as evidenced by the recent leak of FinCen papers, which Buzzfeed had access to.
Member States have been mulling over the idea of a European anti-money laundering authority for a couple of years. Some partners were skeptical of this idea, others advocated increasing the powers of the European Banking Authority, which already performs some coordination tasks. The ABE has insisted on the need to first have common rules so that the new authority can act. In the end, Member States have opted for both options at the same time
The draft conclusions on the fight against money laundering and terrorist financing, which could still undergo some changes, calls for the creation of a European authority and directly applicable common standards, with the so-called “single regulation”.
The new authority could intervene in exceptional situations and replace national supervisors
The ministers opt for this option in front of a directive, to avoid national disparities when transposing the community norms to the national framework. They also request a proposal for the structure and tasks of an EU supervisor at the same time, “to allow simultaneous drafting due to the interdependence of these issues,” says the draft conclusions. The Commission plans to present its proposals on both fronts in early 2021.
The countries propose that the new European authority start by supervising a limited number of entities chosen according to their risk, although it could also intervene in exceptional situations and replace national supervisors if they do not ensure adequate control. The new body could carry out general inspections, including on-site inspections “together with the national supervisor,” as well as give direct instructions or impose sanctions.
Some of the institutions that would be under his mandate would be credit institutions, payment institutions, exchange offices, institutions that handle electronic money and other financial entities. In order to decide whether the supervision is carried out at the central or national level, the conclusions propose to analyze the risks derived from the customer base, their products, the delivery channels and the geographical exposure of these institutions.
Regarding the single regulation, the ministers emphasize the importance of having a directly applicable regulation to reduce national divergences in transposition that undermine effective implementation of EU anti-money laundering norms.
The areas to be harmonized under the new regulation are the types of entities under money laundering rules, customer due diligence requirements, provisions on due diligence for national and foreign politically exposed persons, record keeping, internal controls, provisions of subcontracting and dependence on the parties, administrative sanctions consistent with sectoral legislation, information obligations, provisions on the determination of beneficial owners, provisions on cooperation and exchange of information, and responsibilities and powers of the supervisory authorities at national and European level.
The conclusions underline that the Commission should particularly focus on achieving a “uniform and high standard of customer due diligence”, especially for customer identification and verification of their identity, the nature and purpose of the business relationship, verification of the effective beneficiary of the client and continuous monitoring of the business relationship.
“Such provisions are crucial to prevent illegal money from entering the domestic market through the weakest link,” read the draft conclusions.
The regulator defends an authority and a single regulation at the same time
The president of the European Banking Authority, José Manuel Campa, has long warned that the European approach against money laundering is not appropriate and must be strengthened. “The implementation of our directives in this field is based on principles and is not sufficiently prescriptive,” he said in an interview with El Economista last December.
In his opinion, they leave a lot of space that is used by governments when they are adapted to the national framework. “The consequence is that the ability to control money laundering transactions within the EU is difficult because there is so much diversity,” the Spaniard added. The danger is that once money enters the single market, it can be easily moved. That is why the Union is only as strong as the weakest of our links. And some countries have shown that they are real holes, such as Malta, Cyprus or Estonia.
For this reason, Campa defends progress at the same time in curdling a common regulation and creating a central anti-money laundering authority. He is of the opinion that having only one European authority without a change in existing regulation would likely limit its operability.
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