New set of proposals in the fight against money laundering

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On 7 May 2020, the European Commission published a package of initiatives in the field of anti-money laundering and combating terrorist financing. This package mainly consists of the following instruments:

1> An Action Plan for a comprehensive EU policy on the prevention of money laundering and terrorist financing from the Commission in which it unveils the initiatives it wishes to undertake in this area in the next 12 months. The Commission intends to work on the following 6 axes

o Ensuring the effective implementation of the existing European framework, in particular by continuing to monitor the transposition of the directives in force by the Member States and by evaluating the application and capacities of the Member States in the area of money laundering prevention in the context of the European Semester. The adoption of country-specific AML recommendations is scheduled for the second quarter of 2020.

o Present in the first quarter of 2021 a draft regulation for a more uniform application of the EU framework in this area. This regulation should at least include provisions establishing the list of obliged entities, customer due diligence requirements, internal controls, reporting requirements, as well as provisions on beneficial ownership registers and central bank account mechanisms. A more harmonised approach to the identification of politically exposed persons should also be considered. Other measures could include facilitating the use of remote digital identification of customers.

o Establish a European supervisory authority to integrate, complement and enhance coordination of national systems. National supervisors will continue to be an essential part of this system and will remain responsible for most day-to-day supervision. The establishment of the European core system is a priority, and its functions, competences and interaction with national supervisors should be clearly defined in a legislative proposal, announced for the first quarter of 2021. The task of ensuring EU-level supervision could be entrusted either to an existing European agency, namely the European Banking Authority, or to a new specialised body.

o Establish a support and cooperation mechanism for Financial Intelligence Units. To this end, the Commission will present proposals to establish an EU coordination and support mechanism for FIUs in the first quarter of 2021, after assessing options for its role and structure.

o Strengthen criminal law provisions at EU level and information exchange, while ensuring respect for data protection and confidentiality. The role of public-private partnerships should be encouraged wherever possible between law enforcement agencies, FIUs and the private sector. This can range from the exchange of information on typologies and trends to the exchange of operational information on suspects by law enforcement agencies with obligated entities, in order to monitor the transactions of these suspects. Any sharing of information including personal data will have to be fully compliant with data protection legislation and respect the mandates of the authorities concerned. The Commission will issue guidance on PPPs by the first quarter of 2021.

o Strengthen the international dimension of the EU anti-money laundering and counter terrorist financing framework. A new methodology on the assessment of high-risk third countries is published together with this Action Plan. The Commission will continue to work with Member States and will strengthen its participation in the FATF so that the EU can play a more prominent role at global level.

2> A public consultation on the different options mentioned in the above Action Plan has been launched at the same time as the Action Plan in order to allow all interested parties to react to each of the measures proposed by the Commission and to give their views on how best to achieve the desired results in each case. The deadline for input is 29 July.

3> A new methodology for identifying third countries with strategic AML/CFT vulnerabilities that replaces the methodology for identifying high-risk third countries published in June 2018.

4> An updated list of third countries considered to be high risk for money laundering and terrorist financing, established in accordance with the former methodology. This new list is now more consistent with the lists published by the FATF. The countries on the list are the Bahamas, Barbados, Botswana, Cambodia, Ghana, Jamaica, Mauritius, Mongolia, Myanmar, Nicaragua, Panama and Zimbabwe. Countries that have been removed from the list are Bosnia and Herzegovina, Ethiopia, Guyana, Lao People’s Democratic Republic, Sri Lanka and Tunisia. The Commission has amended this list by means of a delegated regulation. This will now be submitted to the European Parliament and the Council for approval within one month (with a possible extension of one month).

All documents and more detailed information are available online:
> Consult