The EU takes steps towards the adoption of a new Anti-Money Laundering Body in the hopes of eliminating illicit exchanges and preventing further harm to its financial environment.
Money Laundering—the mechanism by which criminals conceal the illicit nature of funds—is an international issue. Importantly, “[i]t is usually associated with the types of organized crime that generate huge profits in cash, such as trafficking in drugs, weapons and human beings as well as fraud.”[2] Large amounts of money are laundered every year. The United Nations Office on Drugs and Crime estimates laundered funds to total between €715 billion and €1.87 trillion annually.[3] Aware of the dangers that money laundering poses, the European Union (EU) has remained committed to preventing its practice.
Regulations to prevent money laundering are not new; in the last decade, the EU has undertaken various actions to combat money laundering within its borders. For one, in 2015, the EU adopted the Anti-Money Laundering Directive (AMLD), which necessitates that businesses in the financial sector “report any suspicious transactions to Financial Intelligence Units.”[4] In 2016, however, a data leak from the database of Panamanian law firm Mossack Fonseca—producing what became known as the “Panama Papers”—revealed the myriad of ways that money laundering was still accomplished via offshore bank accounts, despite the AMLD’s regulations.[5] The troubling trends exposed by the Panama Papers, combined with continued terrorist attacks funded through unscrupulous financing practices, revealed areas of improvement in the AMLD.[6] As a result, the European Parliament amended the directive in 2018.[7] The goals of the amendment were to enhance hostility towards organized crime within the financial environment and to modernize the regulation to keep pace with the financial landscape.[8]
Despite these efforts, the EU recognized the need for additional action, specifically because of the prevalence of crypto assets.[9] As a result, in July of 2021, the European Parliament proposed the Anti-Money Laundering Authority (AMLA), which it provisionally approved in December of 2023.[10]
This provisional agreement established the framework for AMLA’s duties: AMLA will not only have the power to regulate the EU’s financial sector, but will also be able to enforce sanctions on individuals and groups guilty of money laundering.[11] Eva-Maria Poptcheva, a member of the European Parliament for Spain, described the role of AMLA as to “supervise the [forty] riskiest financial entities, and [to] . . . oversee the non-financial sector” to prevent large scale usage of offshore bank accounts and shell companies, such as those revealed in the Pandora Papers of 2021.[12] Today’s global landscape also sees many countries and individuals as the target of sanctions due to their behavior. Poptcheva said that AMLA will have to ensure that the targets of sanctions will not be able to avoid them.[13]
Importantly, the European Parliament still needs to vote to formally adopt AMLA. However, having provisionally agreed on smaller details—like selecting Frankfurt, Germany as the Authority’s host city—the EU is one step closer to making AMLA a reality.[14] Regardless of the details that still need to be ironed out, the EU is well on its way towards further strengthening its defenses against money laundering. While the impact remains to be determined, the EU has demonstrated via this new authority that it is willing to continue modernizing, to keep up with the times and do what it takes to eliminate the illegal activities threatening its financial environment.
[1] Photograph of magnifying glass examining Euro Note in David Robinson, EU Sets Out Bold New Approach to AML, The Banker (July 23, 2021), https://www.thebanker.com/EU-sets-out-bold-new-approach-to-AML-1627045045.
[2] Money Laundering, European Commission, https://home-affairs.ec.europa.eu/policies/internal-security/organised-crime-and-human-trafficking/money-laundering_en (last visited Apr. 9, 2023).
[3] Id.
[4] Id.
[5] Luke Harding, What are the Panama Papers? A Guide to History’s Biggest Data Leak, The Guardian (Apr. 5, 2016, 5:42 AM), https://www.theguardian.com/news/2016/apr/03/what-you-need-to-know-about-the-panama-papers.
[6] Revision of the Fourth Anti-Money-Laundering Directive, European Parliament 2, https://www.europarl.europa.eu/RegData/etudes/BRIE/2017/607260/EPRS_BRI(2017)607260_EN.pdf.
[7] Id.
[8] Council Directive 2018/843, 2018 O.J. (L156/43), https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2018.156.01.0043.01.ENG.
[9] Josh White, EU States, Parliament Agree to Set Up New AML Body, Law360 (Dec. 13, 2023, 8:46 PM), https://www.law360.com/articles/1776752/eu-states-parliament-agree-to-set-up-new-aml-body.
[10] Id.
[11] Id.
[12] Id. Similar to the Panama Papers, the Pandora Papers involved a data leak revealing “millions [of] financial documents secured by the International Consortium of Investigative Journalists and published in 2021.” Id.
[13] Id.
[14] Geert De Clercq, EU’s New Anti-Money Laundering Authority to be Based in Frankfurt, Reuters (February 22, 2024, 3:36 PM), https://www.reuters.com/world/europe/eu-says-new-anti-money-laundering-authority-be-based-frankfurt-2024-02-22/.
Comentários