Cyber Monday Deal: Up to 60% off InvestingProCLAIM SALE

EU weighs tighter rules against dirty money, eyes new agency

Published 10/10/2019, 15:43
Updated 10/10/2019, 15:46
© Reuters.  EU weighs tighter rules against dirty money, eyes new agency

By Francesco Guarascio

LUXEMBOURG (Reuters) - The European Union is considering tighter rules to counter the flow of dirty money into the region's banks and other economic sectors, EU officials said on Thursday.

Following a spat of money-laundering scandals at several lenders that highlighted weak oversight by national authorities, the EU is also considering setting up a new agency or beefing up existing EU-wide agencies.

New rules under consideration could increase controls over sectors where risks of money laundering are high, such as financial services, gaming and real estate, Finance Commissioner Valdis Dombrovski.

One official said stricter rules could also hit intermediaries, like lawyers or tax advisers. The EU has already changed its anti-money laundering rules twice over the past five years to keep up with emerging threats and close loopholes.

Speaking after a meeting of EU finance ministers, Dombrovski said there was also support for plans for reducing states' leeway in applying existing rules.

Currently, the 28 EU states have large discretion in imposing sanctions to wrongdoers and in fighting financial crime. This creates loopholes that criminal organisations exploit.

As part of the overhaul, many ministers supported the creation of a new agency at EU level that would take over supervision powers from national authorities, officials said.

"We need to be ready to discuss some forms of EU supervisory body. It should have an independent structure and decision-making," Finnish Finance Minister Mika Lintila said at the end of the meeting.

The European Central Bank and the EU parliament have called for an EU agency against money laundering, which they believe could better counter the flow of illicit money, estimated by the United Nations to amount to around $2$ trillion a year globally.

Many governments have long opposed changes to the supervision of financial crime, fearing they would lose power and be forced to share sensitive information.

At the meeting on Thursday, some ministers cautioned against changes. One official said Estonia, Malta and other smaller states were among the least keen on reforms.

Last year, the Estonian branch of Danske Bank emerged as the epicentre of the largest money-laundering scandal in the EU. Two Maltese banks have stopped operations since last year because of money-laundering allegations.

France, Italy, the Netherlands and Austria pushed instead for a comprehensive reform, officials said. Germany's finance minister, Olaf Scholz, remained silent during the ministerial debate. Berlin has in the past opposed major reforms.

Talks among states will continue. A final decision on the new framework is expected in December, officials said.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.