Money laundering is the practice of disguising the illegal origin of criminal proceeds. Suspicious transactions linked to money laundering amount to hundreds of billions per year within the EU. The European Court of Auditors (ECA) has started an audit to examine the Union’s efforts to tackle the laundering of dirty money, focusing specifically on the banking sector.
The EU’s anti-money laundering (AML) directive has been in place since 1991, and has been updated on four occasions - most recently in 2018. The Commission, the key player at EU level, has the role of developing and enforcing AML rules in close cooperation with the Member States. This year the European Banking Authority (EBA) took on the tasks of leading, coordinating and monitoring the EU financial sector’s fight against money laundering. It is the responsibility of the Member States to apply and enforce the EU’s AML rules through national legislation, and to prosecute money laundering offences. Within Europe, Europol estimates the value of suspicious transactions at around 1.3 % of EU GDP.
“Money laundering is increasingly a serious global threat, with criminals often seeking to launder money where controls are weakest, often far from the source of the funds”, says Mihails Kozlovs, the member of the European Court of Auditors responsible for the audit. “Given the enormous scale of this criminal practice, including in the EU, and a number of recent high-profile scandals involving banks, we have decided to audit the effectiveness of the EU’s action in the fight against money laundering in the banking sector”.
Press Release: EU action against money laundering in the banking sector to go under auditor scrutiny