An action plan, a new delegated act establishing the European ‘black’ list, and a new methodology: March promises to be a busy month for the European Commission in the fight against money laundering.
According to our information, the Commission’s action plan, which should be presented on 25 March in the form of a political communication, is not expected to be substantially different from the package of reports presented in July 2019, which identified the shortcomings of the European framework and already formulated paths to be followed (see EUROPE 12303/2).
It should be limited to a description of the areas of work that the Commission has identified as well as the possible options. It will be followed by a call for input from Member States and stakeholders to feed into future legislative initiatives (see EUROPE 12425/9).
The action plan should also confirm the Commission’s intention to legislate in the future by means of regulations rather than directives. As such, a proposal for a regulation concerning the fight against money laundering is expected in the first quarter of 2021.
Several provisions of the Fifth Money Laundering Directive are expected to be included in the proposed regulation, in particular vigilance measures, supervisory rules, and rules on cooperation between financial intelligence units.
The future regulation is not intended to replace the directive, we have been assured - the directive will, moreover, remain in place - but it will harmonise the application of the rules and add new ones.
In particular, it is expected to include rules on virtual currencies in order to align the European framework with that of the Financial Action Task Force (FATF) within the OECD.
The Fifth Money Laundering Directive already provides rules for providers of exchange services between virtual and legal currencies and for providers of portfolio services. The FATF has gone further by also covering exchanges between virtual currencies as well as initial coin offerings (ICOs).
Launched at the end of December 2019, the public consultation on the adequacy of the existing regulatory framework for cryptoassets (see EUROPE 12394/29) also asks stakeholders about the need to align the definition used in the EU framework with the broader FATF definition and with the term “cryptoassets”.
The idea of conferring certain supervisory powers on an EU body is, moreover, reportedly still on the table (see EUROPE 12384/4). The debate remains open, we have been assured, although the communication is not expected to decide between the creation of a new specialised agency and the mobilisation of an existing entity such as the European Banking Authority.
New European ‘black’ list in March
According to our information, the Commission is also due to present its new European ‘black’ list of non-Member States whose money laundering arrangements are deficient and threaten the European financial system (see EUROPE 12193/28) during March, one year after its initial list was rejected by the EU Council (see EUROPE 12209/12).
Discussions are still ongoing within the Commission as to whether the proposal for a delegated act and the new methodology should be presented at the same time as the action plan or whether they should be separated.
Since the Member States have called for greater alignment of the EU list with the FATF list, the Commission waited for the update of the FATF list, which took place last week.
It will not, however, be a “copy and paste” from the FATF list, according to a recent statement by Commission Vice-President Valdis Dombrovskis (see EUROPE 12428/23), thus confirming that the European institution still intends to continue with its autonomous methodology, as called for by the European Parliament (see EUROPE 12214/6).
Furthermore, the methodology presented in October 2019 to the European Finance Ministers has reportedly undergone several changes and is not yet fully stabilised, according to our information. This included giving non-Member States 12 months to respond to the Commission’s concerns prior to their inclusion on the European ‘black’ list (see EUROPE 12340/19).
In any case, the Commission hopes that, this time, its new delegated act will satisfy both the EU Council and Parliament. (Original version in French by Marion Fontana)