With a view to confront a wave of money-laundering scandals within the banking industry, Europe’s finance leaders are recommending that a regional anti-money laundering agency be formed to fight and prevent such crimes. They are calling upon European Commission, the EU’s executive arm, to consider and make a proposal for setting up a common institution to fight illicit financial flows. They’re set to agree on the recommendations Thursday in Brussels.

 

A recent string of high-profile scandals has shut down banks and slashed lenders’ share prices in several European countries, exposing the shortcomings of the current framework. The current system is vulnerable to abuse because it’s largely legislated along national lines. A coordinated response by the region’s finance ministers would open the door for a revamp of the system’s supervision.

 

According to a draft document seen by Bloomberg, the commission is expected to “explore in particular the possibilities, advantages and disadvantages of conferring certain responsibilities and powers for anti-money laundering supervision to a Union body with an independent structure and direct powers.”

 

Sweden’s SEB AB last month became the latest lender under scrutiny after acknowledging that more than $90 billion in transactions were made at its Estonian operations by non-residents, with roughly a third at “increased risk for money laundering.” That followed scandals over the past two years including at Danske Bank A/S, Nordea Bank Abp and ING Groep NV.

 

However, there are still many questions on what exactly needs to be done, according to officials involved in the talks. Controversial issues include areas like law enforcement, which are traditionally handled at the national level, they said.

 

Date: 5 Dec 2019

Argus Global specializes in regulatory compliance and anti money laundering needs. We can help you determine if your company is up to date with the latest regulations with compliance reviews, and we offer as well ongoing support for all your compliance needs.

 

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