At a high-level seminar held on Friday by the European Court of Auditors in Luxembourg, EU experts called on legislators to ensure that proposed new EU anti-money-laundering (AML) and counter-terrorism financing (CTF) legislation closes previously identified loopholes, including fragmented and poorly coordinated oversight. The ECA, the EU’s financial watchdog, organised the seminar in the wake of its critical report on fighting money laundering in the banking sector and the Commission’s legislative proposals for strengthening the relevant rules.

Representatives from the EU institutions, Member States, IMF, banking supervision and industry convened to discuss the new AML/CTF supervision model proposed by the European Commission and the progress achieved in the negotiations so far. They discussed topics including expectations and feasibility, effective implementation, and future-proofing. They paid particular attention to the proposed governance arrangements for the new Anti-Money-Laundering Authority (AMLA), and how the new body will be able to interact effectively with other EU and national control authorities, without creating unnecessary compliance burden for the industry.

Below you will find some extracts from key speakers. The recorded seminar is available in full at this link.

ECA President Klaus-Heiner Lehne opened the seminar by pointing out that the fight against money laundering and terrorist financing was one of the most pertinent issues the EU was currently facing. “In view of the terrorist threats and the estimated amount of criminal proceeds being legitimised each year in the EU, there is an unprecedented momentum for further action. The EU’s credibility as one of the world’s major economic players depends on the success of its fight against money laundering and terrorist financing.”

European Commissioner Mairead McGuinness (financial services, financial stability and Capital Markets Union) in particular raised the issue of trust and stressed that dirty money destroys trust and corrupts our financial system. “The renewed focus on Russian oligarchs has reminded us that those who engage in activities, illegal activities around money laundering can too easily move their dirty money into our financial system and hide its origins,” she said, adding that the EU needed to close the loopholes in its rules on money laundering and build a genuine European anti-money-laundering regime.

For the Czech Council Presidency, Stanislav Kouba (Deputy Minister for Taxes and Customs) underlined that anti-money-laundering (AML) was one of the crucial files for the Presidency. “The urgency of these files arises because of the war in Ukraine. We as the Union deal with this using the sanctions packages and all of this is strongly accompanied by strange financial operations, and some of that should be followed by AML offices”. He also stressed that coordination between our national offices was crucial, as is the new authority to coordinate their work.

MEP Ramona Strugariu (Renew, shadow rapporteur on AML legislative package) also referred to the context of Russian aggression against Ukraine, which according to her was a good opportunity for all of us to see how we tolerated “for an incredibly long period of time these suspicious and illicit flows of money towards the European Union without addressing it properly.” She also added that the way criminal networks amplify and diversify their methods was incredible, and that it was crucial for the EU to keep up with it.

ECA Member Mihails Kozlovs hosting the seminar concluded that the ambitious legislative package proposed by the European Commission in July 2021 represented an excellent opportunity for policymakers to close the loopholes singled out in the ECA’s special report published in June 2021. “It remains of the utmost importance to keep up momentum and complete the negotiations on time”, he said.

Since 2017, a number of prominent cases have surfaced in the EU alleging the laundering of billions of euros through EU credit institutions. In June 2021, the ECA published an audit report concluding that weaknesses with regard to money laundering and terrorist financing needed to be addressed at EU level. In July 2021, the Commission presented an ambitious package of legislative proposals to strengthen the rules on AML and CTF, which is currently being discussed by the European Parliament and the Council of the EU.