The European Commission is proposing to strengthen the fight against money laundering by handing the European Banking Authority new powers.
In response to a series of AML failures at ING, Deutsche Bank and Danske Bank, President Jean-Claude Juncker says there are concerns that AML rules are not always supervised and enforced effectively across the EU.
He said this not only creates risks for the integrity and reputation of the European financial sector, but may also have financial stability implications for specific banks. In response the European Commission has proposed to amend the Regulation establishing the European Banking Authority (EBA) in order to reinforce the role of the EBA in anti-money laundering supervision of the financial sector.
Commission vice-president Valdis Dombrovskis, responsible for Financial Stability, Financial Services and Capital Markets Union, said: “Europe’s Banking Union must be built on the highest standards of integrity. Anti-money laundering supervision has failed all too often in the EU.
“Today we are enabling the European Banking Authority to make sure that different supervisors cooperate and exchange information and that anti-money laundering rules are enforced effectively across EU countries. The EBA will also be entitled to request investigation into alleged breaches of the rules and will become Europe’s phone number for cooperation with international partners on issues related to combatting money laundering in the financial sector.”
The amended regulation will aim to ensure that breaches of anti-money laundering rules are consistently investigated, allowing the EBA to request national anti-money laundering supervisors to investigate potential material breaches and to request them to consider targeted actions – such as sanctions.
As part of the change, the EBA’s existing powers will be reinforced so that, as a last resort if national authorities do not act, the EBA will be able to address decisions directly to individual financial sector operators.
The commission is also looking to enhance the quality of supervision through common standards, periodic reviews of national supervisory authorities and risk-assessments; in addition to enabling the collection of information on anti-money laundering risks and trends and fostering exchange of such information between national supervisory authorities (so-called data hubs).
It also plans to facilitate cooperation with non-EU countries on cross-border cases and establish a new permanent committee, which brings together national anti-money laundering supervisory authorities.
Commissioner for Justice, Gender Equality and Consumers, Vĕra Jourová, added: “Europe has the strongest anti-money laundering rules in the world. But recent cases in the banking sector showed that they are not always supervised and enforced with the same high standards everywhere across the EU. Our system is as strong as our weakest link. In times where money moves across borders at the click of a mouse, we must ensure supervision that is pro-active and fast. Today’s changes will make sure the rules are evenly enforced throughout the EU.”
Copyright © 2018 RegTech Analyst
Copyright © 2018 RegTech Analyst
