Europe Daily Bulletin No. 13114

4 February 2023
ECONOMY - FINANCE - BUSINESS / Interview money laundering
Fight against money laundering is “more than ever a question of security” for Europe, says Eero Heinäluoma
Brussels, 03/02/2023 (Agence Europe)

With the Russian military aggression in Ukraine, the Swedish Presidency of the Council of the European Union has made security one of its priorities, including the fight against money laundering. It therefore wishes to advance discussions on the ‘anti-money laundering’ Regulation and a new ‘AMLD6’ Directive (see EUROPE 13093/10). In an interview with EUROPE on Thursday 2 February, MEP Eero Heinäluoma (S&D, Finnish), co-rapporteur on the Regulation on the prevention of the use of the financial system for the purpose of money laundering or terrorist financing (see EUROPE 12917/24), reviewed the issue. (Interview by Anne Damiani)

Agence Europe - You are co-piloting with Damien Carême (Greens/EFA, French) the discussions in the European Parliament on the ‘anti-money laundering’ Regulation. Could you tell us a little more about this text?

Eero Heinäluoma - In our proposal for a report, we suggest limiting cash transactions to €5,000 instead of €10,000. As we have seen in several cases, cash is still widely used for money laundering, for example in corruption cases. Thus, stricter rules for cash, limiting its use, are important in the fight against money laundering.

We must therefore recognise the role of cash. It is still important for many people, but I am pretty sure that we do not need to use large amounts of cash. In some cases, I would say that tens of thousands or hundreds of thousands of euros in cash are not necessary for anyone who is not a criminal or not involved in money laundering, because, of course, you can use the banks and we are also developing new payment possibilities, such as the digital euro, which will be a big step forward.

Until now, there have been problems of interpretation of the Directive, as each country could regulate as it wished. It is problematic for economic life not to know what the rules are. This Regulation will reduce fragmentation within the EU.

The ‘AMLD6’ Directive will deal with cooperation between financial units and administrative details in the Member States.

We expect a vote on the proposed Regulation in the Committee on Economic and Monetary Affairs at the end of March. Together with the proposed Directive and ‘AMLA’, they are part of the same legislative package. Interinstitutional negotiations could thus start in April or May.

This anti-money laundering package is important because it is more than ever a question of security for Europe. After the Russian invasion of Ukraine, after the horrible things Russia is doing, this money laundering is also a big threat to our security. This means that foreign nations can have a lot of influence on our societies by laundering money and gaining influence through this laundered money in our societies.

We want to be totally sure that this money is not used in or has no effect on our policies. There is a certain atmosphere in Parliament, people can feel that this is a security issue, that we are united and that we are ready to stop money laundering.

In a speech to the plenary session (see EUROPE 13113/13), you pointed out that there are loopholes in EU anti-money laundering law. What loopholes are you talking about?

The information on the beneficial owners of companies is, in my opinion, the biggest loophole (see EUROPE 13090/12).

If we don’t know who owns a company, who transfers the money, we don’t see the true face of the company. We think we know who the real owners are, but if they are hiding behind, not the first company, but the second or third, we don’t see who benefits from the money transfers. We don’t see the real crooks and, for example, the Russian oligarchs who can hide behind very complicated corporate structures.

This is therefore an important element of the overall reform. In its draft ‘AMLD 6’ Directive, the European Commission has proposed 25%. I believe that the threshold should be set at 5%. You cannot escape the rules by having five companies holding 20% of the shares in the company in question. Lowering the threshold to 5% means that you can really see who owns the companies and who will benefit.

There are ongoing discussions in the EU Council, but also in Parliament with the shadow rapporteurs, on the threshold for informing about beneficial ownership. It is a difficult question, because there are also other opinions, as always, but we try to find a good compromise.

There is talk of a public register of beneficial ownership after the EU Court of Justice overturned the provision requiring disclosure of beneficial owners of companies (see EUROPE 13068/28). What are your thoughts on that?

Indeed, together with the threshold, the register is one of the main points of the reform. This decision of the Court of Justice makes things more complicated.

Our aim in Parliament is to ensure that the register is public and open to journalists. The real money laundering scandals have been uncovered by the work of journalists and civil organisations, not by the police or financial intelligence units. A register should be opened, as this can benefit citizens. Transparency is one of the key factors in the fight against money laundering.

This decision was a real surprise for me and I must say that I do not fully understand the reasoning behind it. I suppose this is some kind of interpretation regarding privacy. It is also a question of proportionality. As always, there is transparency on the one hand and privacy on the other.

I would say that this is a bit of an open question. Because Parliament makes the laws and then the Court interprets the laws. We are working on it, the book is not closed.

In your opinion, should the resources of the police be increased?

I believe that the new European Anti-Money Laundering Authority ‘AMLA’, when it starts its work, will have sufficient resources to be able to really intervene. It will have sufficient resources to collect information, implement rules or issue recommendations to partners and national intelligence units. It will have a possibility to intervene, if it sees that in some of the Member States that duties are not being fulfilled.

You mention the AMLA. Member States have agreed on the details of this new EU body, but the question of the seat remains open (see EUROPE 13093/10). What are your thoughts on that?

The real change is in policy making. For the first time, according to the Court’s decision, the seat will be chosen by co-decision between Parliament and the EU Council.

We agreed that it is important that all candidates have the opportunity to present themselves formally and openly in a transparent manner. There must be criteria that are known to all. But it will be really interesting to see what happens. We agreed that this AMLA seat would not be the first issue we would address, but the last, because, of course, there will be a hard struggle.

There are many good candidates. Paris, for example, is a very strong candidate.


Russian invasion of Ukraine