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EU to tighten rules against money laundering, terrorist financing


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EU to tighten rules against money laundering, terrorist financing

The European Commission is preparing proposals that would give the European Banking Authority more resources and greater enforcement powers to probe activities of banks involved in illicit financing, the Financial Times reported.

ECB executive board member Benoit Coeuré earlier urged the European Union to create a single agency to reinforce the enforcement of anti-money laundering rules, citing recent cases that he said have compromised some banks' functions and viability, according to the newspaper. A group of experts set up by the commission has prepared a preliminary plan for potentially tightening anti-money laundering rules under which a single, centralized EU supervisor against money laundering could be set up by 2019, Reuters said.

Danske Bank A/S is investigating whether it has been used by Russia-linked companies for money laundering and is looking at $150 billion of transactions that flowed through the accounts of its Estonian branch between 2007 and 2015, while ING Groep NV recently agreed to pay €775 million to settle an investigation into potential failure within the company to prevent money laundering, among other shortcomings.

The commission is also looking to expand the mandate of the recently created European Public Prosecutor's Office and give it powers to launch investigations into terrorist financing across EU member states beginning 2025, according to the Sept. 9 report. Any change to the mandate of the prosecutor's office will have to agreed by all 22 participating EU member states, the FT noted.

Both measures are still being finalized and are expected to be formally announced in the week of Sept. 17, the FT added.

A confidential report by EU regulators earlier revealed shortcomings and gaps in the bloc's anti-money laundering measures, noting that the EBA has the equivalent of 1.8 full-time staff working on money-laundering issues.