European governments reach preliminary deal on tighter AML controls

European Union (EU) governments have reached a preliminary deal to bolster bank supervision in the hopes of preventing money laundering according to Reuters.

The news agency says it understands that the deal is based on recommendations made by the European Commission (EC) to introduce changes in banking supervision in response to a string of money laundering cases involving some of Europe’s largest banks (Trade Based Financial Crime, 28 September 2018).

Deal by December

The deal is expected to be confirmed by December but may fall short of demands for EU states to be barred from acting unilaterally in decisions about imposing sanctions.

The final agreement may also not include the establishment of a dedicated anti-money laundering (AML) agency. This would disappoint the European Central Bank because it has called for a new agency to tackle financial crime.

EBA oversight

The deal is however expected to give more powers to the European Banking Authority (EBA) to order national regulators to investigate suspected breaches of AML regulations.

The EBA will also be empowered to step in if national regulators do not act on AML breaches and would be able to force a bank “to take all necessary action to comply with its [AML] obligations”.

Further concerns

The EU is also concerned about arrangements in 13 of the EU’s 28 states where wealthy individuals can buy passports and residency permits.

The countries that allow this practice are Austria, Bulgaria, Cyprus, France, Greece, Ireland, Latvia, Luxembourg, Malta, Netherlands, Portugal, Spain and the UK.



Categories: Trade Based Financial crimes News

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