The Finance Ministers of the Member States of the European Union agreed on Wednesday 4 November on common guidelines for the Commission when it finalises its action plan to strengthen the fight against money laundering and terrorist financing (see EUROPE 12482/8) at the beginning of 2021.
In conclusions supported by all Member States and expected to be formally adopted on Thursday by written procedure, the EU Council backs the Commission’s flagship proposals, including its intention to present a proposal for a regulation to transform part of the provisions of the 5th anti-money laundering directive into directly applicable provisions and to set up a European coordination mechanism for national financial intelligence units (see EUROPE 12593/7).
The text also supports the Commission’s intention to present a proposal to establish a European supervisor that would cooperate with national authorities and intervene in cases where there are “objective reasons to believe that supervision can be carried out more effectively at EU level than at national level”.
One of the points of discussion between Member States was the sequencing of the proposals. While some Member States wanted to have a single set of rules first before establishing a European supervisor, others insisted that the two proposals should progress together. Finally, the text establishes a compromise by asking the European Commission to present the three proposals at the same time, but also asks to give priority to work on the Regulation and to base the other two proposals on it.
According to a European source, the EU Council conclusions try above all “not to lock the Commission into a specific path”, so that it can analyse the advantages and disadvantages of each option and thus inform future legislative discussions.
The competences of the European supervisor are still divided
Although the ministers managed to agree on a common text, the debate in open session nevertheless revealed differences of opinion as to the concrete competences of the future European supervisor; these are likely to resurface during the negotiations between the Member States on a concrete legislative proposal in 2021.
Indeed, the text asks the Commission to propose a gradual approach to the scope of supervision, starting with a relatively small number of obliged entities at risk in the financial sector at the outset – including bureaux de change, credit, payment, electronic money and other providers of crypto-assets – and gradually increasing the number of obliged entities. At a press conference, the Commission’s Executive Vice-President Valdis Dombrovskis confirmed that the Commission intends to follow such a step-by-step approach.
During the debate, some countries, such as Slovenia and Luxembourg, were in favour of “as much competence as possible”, including the inclusion of the non-financial sector in the scope of application. In addition, Luxembourg, France and Italy considered that particular attention should be paid to crypto-assets, which are commonly used as a source of terrorist financing and crime.
Others, on the other hand, want a more limited scope. This is particularly the case for Poland, which has come out against direct supervision of non-financial sector entities. According to the country, the European supervisor should also not have extensive powers to impose sanctions on obliged entities. The right to withdraw a licence to conduct banking activities should, for example, only be considered after consultation with the national authority, he said.
Estonia, for its part, was even more critical of the proposal for a European supervisor. “The benefits of a European level of supervision are yet to be presented. It is not only about the fight against money laundering, but also about subsidiarity and accountability”, the country said , asking the Commission for an in-depth impact assessment.
See the conclusions: https://bit.ly/32cCw1r (Original version in French by Marion Fontana)