Anti-Money Laundering
The European future priorities in tackling
money laundering
ALDA
Brussels, 09.10.2014
European Commission
DG Internal Market and Services
David Schwander
The issue…
Criminal proceeds: US$ 2.1 trillion in 2009
Amount available for money laundering: US$ 1.6 trillion
Amount of funds intercepted by law enforcement: <1%
Amount of seizures: <0,2%
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Source: UNODC, Commission SWD(2013) 21
Approach to tackle ML/TF
Global approach through FATF
Short term priorities (4th AMLD and FTR)
Long term priorities
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Financial Action Task Force (FATF)
 Global standard-setter for measures to combat ML and TF
 Intergovernmental body with 36 members and the participation of over
180 countries through a global network of FATF-style regional bodies
 Commission = one of founding members of FATF
 original FATF standards amended in the aftermath of 9/11,
fully revised in June 2003 ( Third AMLD),
latest revision of standards in February 2012 ( Commission's
proposals, Fourth AMLD)
Global approach
 FATF
"The FATF calls upon all countries to implement effective measures to bring their national
systems for ML, TF and PF into compliance with the revised FATF Recommendations"
(FATF Recommendations, Feb. 2012)
 G8 and G20
"Our financial systems are exposed to significant risks from money laundering and terrorist
financing. We fully support the FATF Standards and commit to implementing them
effectively" (June 2013 G8 Communiqué).
European Council
"There is a need to deal with tax evasion and fraud and to fight money laundering,
within the internal market and vis-à-vis non-cooperative third countries and
jurisdictions, in a comprehensive manner (…). The revision of the third anti-money
laundering Directive should be adopted by the end of the year;" (May 2013 European
Council Conclusions).
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Current legal framework
 Third Anti-Money Laundering Directive (2005/60/EC)
 In place since 2005
 European framework built around the international FATF standards
 applies to financial sector, lawyers, notaries, accountants, real estate
agents, casinos, company service providers and all dealers in goods
when payments are made in cash in excess of €15 000
 Changes in international standards (February 2012)
Why the revision?
to adapt legal framework to counter new threats of ML and TF
to reflect recent changes due to revised FATF Recommendations
to counter criticism that MS implementation has been inconsistent with
FATF Recommendations (e.g. on simplified due diligence)
to strengthen the Internal Market
The Commission's proposals
1.A Directive on the prevention of the use of the financial system for
the purpose of money laundering and terrorist financing
(4th AML Directive)
2.A Regulation on information accompanying transfers of funds
basic approach:
 keep text where possible
 streamline text where possible
Principal obligations imposed by current
framework
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Identification of customer and the “Beneficial Owner”
Obligation to report suspicious transactions
Ongoing monitoring
Record keeping
Supervision
Staff protection
Main elements of new DIRECTIVE
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risk-based approach
coverage of tax crimes as predicate offence
coverage of gambling sector
cash payments of €7 500 or more
customer due diligence (CDD)
Politically Exposed Persons (PEPs)
information on beneficial owner
reinforcement of sanctioning powers
Cooperation between Financial Intelligence Units
European Supervisory Authorities (ESA)
 beyond FATF requirements
 beyond FATF requirements
 beyond FATF requirements
 beyond FATF requirements
Risk-based approach
 Understand ML/TF risks, target resources more effectively and apply
preventive measures that correspond to risks of particular sectors/activities
 Evidence-based measures at three levels:
Member States  identify, understand and mitigate risks + share results
Institutions and persons covered by Directive  identify, understand and mitigate risks and
document/update assessment of risk
Supervisors  resources can be focused on areas where risks of ML/TF are greater
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 Risk assessment work also carried out at supra-national level
 Make CDD-rules more risk sensitive – based on indicative
and non-exhaustive risk factors:
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enhanced measures where risks are greater,
simplified measures where risks are demonstrated to be less
Key Milestones in the process
• Feb 2012 Adoption of FATF international standards
• Feb 2013 Adoption of COM proposal for a 4th AML Directive
• June 2013 G8 Communiqué – fight against tax evasion is now a
major topic and linked to the AML debate
• March 2014 – EP completes its first reading
• June 2014 – Council, under GR Presidency, agrees on a general
approach
------------------------------------------------------------------------------• October 2014 – kick off of Trilogues – to reconcile EP and
Council positions
• End 2014 – Political agreement?
• 2 years transposition period
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Future challenges
• Ensure effective implementation of AMLD and RBA
• EU Supranational risk assessment
• Improve operational cooperation between all players public and private sector
04/02/2013
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Thank you for your attention!