The European Court of Auditors said in a special report published on Monday 28 June that the EU’s anti-money laundering supervisory framework is too fragmented and uncoordinated.
The auditors first looked at the European Commission’s action. In particular, they found that its risk analysis procedure lacked a geographical dimension and did not effectively prioritise risks.
They also conclude that the transposition of EU legislation in this area is complex and uneven and that the Commission’s assessment of it is too slow. In particular, the auditors recommend that the Commission use Regulations rather than Directives wherever possible.
The auditors also looked at one of the EU’s main tools in this area, the list of third countries with high risk of money laundering. In their view, the list is not adapted to the specific threats to the EU, as it is not autonomous and is still too aligned with the Financial Action Task Force (FATF) list. They therefore recommend that the Commission present a new EU list by the end of the year, according to the new methodology (see EUROPE 12490/11) and in close coordination with the European External Action Service (EEAS).
In its report, the European Court of Auditors looks at other actors, such as the European Banking Authority (EBA), which has the power to investigate potential violations of EU law in this area. But it concludes that the EBA’s response to allegations of breaches of EU law remains excessively slow.
The auditors also found “evidence of attempts to lobby members of the Board of Supervisors” while they were deliberating on a possible recommendation on a breach of EU law.
They also welcome the fact that the European Central Bank (ECB) shares relevant information with national supervisory authorities, but regret that it has neither the responsibility nor the power to investigate how these authorities use the information received.
For Mihails Kozlovs, the Member of the Court responsible for the report, the legislative reform that the European Commission is expected to present in July is an opportunity to address the fragmentation of the EU framework and the weaknesses identified in this report.
As part of this reform, the Commission plans to propose the creation of a new authority dedicated to the fight against money laundering (see EUROPE 12720/16). The report neither supports nor opposes the establishment of such a body, but stresses that whatever solution is proposed, the Commission must address the current shortcomings, Mr Kozlovs told the press.
On Monday, the European Commission confirmed that its new reform would improve the detection of illegal money flows, but also improve the coordination and work of the different European authorities.
See the report: https://bit.ly/3jnpMOU (Original version in French by Marion Fontana)