EU to get its own anti-money laundering body

After almost a year of discussions, EU finance ministers have agreed to launch a regulatory body focused on fighting money laundering.

At the same time, the council of finance ministers gave the green light for the European Commission to harmonise anti-money laundering and rules across the trading bloc, according to Reuters.

“The Council supports setting up an EU-level supervisor with direct supervisory powers over a selected number of high-risk obliged entities, as well as the authority to take over supervision from a national supervisor in clearly defined and exceptional situations,” the ministers said in a statement seen by Reuters.

The EU’s finance ministers first flagged that they were intending to launch an AML authority in October 2019. At the time, we reported that the new central body would police financial services organisations to ensure they are complying with the EU’s due diligence and AML safeguards.

The initiative came about after the European financial sector was rocked to its core in 2017 when it was revealed that Danish Danske Bank’s Estonian office had been used to launder roughly €200bn ($223.05bn). Danske Bank has lost two-thirds of its value since the scandal broke.

Deutsche Bank and Swedbank were also pulled into the scandal as both had allegedly facilitated some of the transactions. For Swedbank, both the chairman and the old CEO were sacked as the consequence to the affair. All three banks are still dealing with fallout and the costs of continuous scrutiny from regulators.

Consequently, it was hardly surprising that several of the RegTech stakeholders we spoke to at the time were happy to welcome the financial crime-fighting body.

“I am a very strong supporter of an anti-money laundering authority – it’s something I’ve been suggesting for many years,” Remonda Kirketerp-Møller, founder and CEO of Muinmos, the onboarding RegTech company, told RegTech Analyst at the time. “The regulators simply do not have the bandwidth to cover this in addition to their other supervision work.

“In order to create investor protection and stability in the financial services sector, we need more than just regulation and supervision, not just in AML but in all areas in which the investor deserves to be protected. I believe it’s important that any new authority not only provides supervision, but also provides tools and technology to aid financial services organisations in addressing these critical areas.”

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