The EU is to explore the creation of a central authority to crack down on money laundering activity after a series of high-profile scandals have underlined Europe’s weaknesses in preventing dirty cash from flowing through its banks.
The bloc’s finance ministers are expected to formally mandate the European Commission to make recommendations on a new “independent” enforcement body with “direct powers,” according to a draft statement to be endorsed when they meet in December.
The body’s mission would be to police financial institutions’ compliance with EU rules on customer due diligence and other safeguards. The proposal would mark a significant ramping up of Europe’s response to a wave of money-laundering scandals over the past two years that have revealed ways for criminals to exploit the EU banking system.
France and the Netherlands, which is also seeking to toughen EU anti-money laundering rules, have said the best solution would be the creation of a new authority from scratch. But they fear it might take too long and have also suggested boosting the existing European Banking Authority, the pan-EU banking regulator, as an “alternative and quicker option.”
Members of the European Parliament however have criticised the EBA for failing to use its existing powers to act on the recent scandals. The EBA rejected its own internal report highlighting failings in the supervision of Danske by Danish and Estonian regulators, Brussels lawmakers have argued.
Via Financial Times