On July 24th, 2019, the European Commission published reports including one on the assessment of recent alleged money laundering cases involving EU credit institutions. These reports demonstrated the gaps in the implementations of rules.
The fight against money laundering and the financing of terrorism is one of the main priorities of the European Commission. However, many financial institutions did not comply effectively, or not at all, with the requirements in the fight against money laundering and terrorist financing.
The up-to-date list of recent money laundering scandals in EU
As a result of these various scandals and to guarantee the integrity of the financial system of the European Union, these different reports made by the European Commission underlined the lessons learned and the things that need to be improved. The major gaps identified in the latest AML European Commission report are:
Misapplication or inapplicability of the legal obligations to which anti-money-laundering and terrorist financing systems and controls are subject;
Deficiencies of the authorities in the fight against ML and TF;
Lag between risk propensity and risk management;
Ineffective supervision of anti-money laundering and terrorist financing policies.
The dissonance between Member States AML diligenceBesides, the Commission noted that the Member States did not apply the rules in the same way, which makes it difficult for the Union to prevent money laundering and the financing of terrorism.
Banks have not complied with essentials requirements of the anti-money laundering directive, such as risk assessment, customer due diligence and reporting of suspicious transactions to financial intelligence units and activities ;
Public authorities intervened only after significant risks had materialized or only when they were aware of repeated cases of non-compliance with rules and governance. The reactions of banking supervisors have been variable in timing and action. The cooperation between the national supervisory bodies and the European Central Bank should be further improved.
Even with the latest reforms and directives on money laundering (4th, 5th AML directive and soon the 6th AML directive) which solve a large part of the problems noted, the European Commission must implement new legislative acts.