Five months after presenting its anti-money laundering action plan (see EUROPE 12482/8), the European Commission presented its current thinking at a high-level conference on Wednesday 30 September.
Although the action plan did not go so far as to decide between creating a new European authority or allocating new responsibilities to the European Banking Authority (EBA), on this occasion Valdis Dombrovskis, the Executive Vice-President of the European Commission, said that he was in favour of creating “a dedicated anti-money laundering authority with significant and direct supervisory powers regarding the most risky obliged entities”.
He believes the authority should focus on the financial sector, while the supervision of non-financial sector obliged entities would initially be entrusted to national authorities.
The Executive Vice-President stated that the Commission could then look, as a second step, at the idea of “more radical reforms”, including direct supervision, that would apply to the non-financial sector.
Odile Renaud-Basso, the Director General of the French Treasury, believes that the future EU supervisor should focus on the riskiest activities. She believes that an architecture inspired by the Single Supervision Mechanism (SSM) for banks would “not necessarily be the best option”, as the risk of money laundering is not necessarily related to the size of an institution, but to the nature of its business.
Jörg Kukies, the German State Secretary for Europe and Financial Markets, revisited the conclusions on the action plan being prepared by the Council of the EU, which, it is expected, will be adopted in November (see EUROPE 12563/23). As would be expected, he expressed very different views in the Council of the EU on the issue of dividing tasks between the future European supervisor and the national authorities.
Among the points where consensus has been reached, Kukies mentioned the fact that EU surveillance will not be able to completely replace national surveillance. Member States also seem to agree that the EU supervisor should take on tasks where they would be able to provide real added value compared to national supervision.
He also said there was consensus that EU supervision must be equipped with an “effective tool box” - proof, in his view, that a majority of countries nevertheless recognise the need to delegate some competences to EU level.
More in-depth deliberations are still needed in the Council of the EU, but Kukies believes that the Commission will have to strike a balance between ambition and feasibility in its design.
Harmonisation. Participants also discussed using a regulation to harmonise some of the provisions in the fifth anti-money laundering Directive. “This is not about creating new obligations for the sake of it - but to make the existing rules easier to apply across the single market and to make sure that the rules are applied effectively”, Dombrovskis explained.
Renaud-Basso believes it is essential that the regulation takes into account the high level of ambition achieved in some of the Member States and will therefore need to align with the strictest rules in force at national level.
Financial intelligence. Dombrovskis said that the recent ‘FinCEN files’ scandal (see EUROPE 12564/11) has clearly shown that the growing number of reports submitted to national financial intelligence units is putting their resources under pressure.
He reported that the Commission intends to set up a coordination and support mechanism to help EU FIUs carry out joint analysis and develop standards for reporting suspicious transactions.
This should be a priority action, in the opinion of Jens Henriksson, the boss of Swedbank, which was affected by a money laundering scandal in 2019. He believes FIUs should provide guidance to banks on the relevance of the reports they send involving suspicious transactions.
The conference participants agreed that the EU needs to be ambitious in this area to ensure that it “closes the door on dirty money”. Everyone is now eagerly awaiting the concrete legislative proposals from the Commission, which are expected in the first quarter of 2021. (Original version in French by Marion Fontana)