Brussels, 30th June 2004
A proposal to further strengthen the EU’s defences against money laundering and terrorist financing has been presented by the European Commission. The proposal would update and improve the EU’s existing anti-money laundering Directive. In particular, money laundering would be defined as concealing or disguising the proceeds of a wider range of serious crimes. It would also ensure coherent application in all Member States of the latest Recommendations of the Financial Action Task Force (FATF), the world anti-money laundering body, which now cover not only the laundering of the proceeds of crime but the financing of terrorism. The proposal will be forwarded to the European Parliament and the EU’s Council of Ministers for adoption under the so-called ‘co-decision’ procedure.
Internal Market Commissioner Frits Bolkestein said: “The fight against money laundering and terrorist financing is a top political priority for the Commission. Since the first Directive of 1991, the Community has been at the forefront of international efforts to combat the laundering of the proceeds of crime. Massive flows of dirty money can damage the stability and reputation of the financial sector and threaten the single market, while terrorism shakes the very foundations of our society. The June 2003 revision of the Forty Recommendations of the Financial Action Task Force (FATF), has strengthened the world anti-money laundering standard and extended the rules to cover the financing of terrorism. The EU Directive must match that standard and ensure its co-ordinated application in the enlarged Union”.
The 1991 EU Directive concentrated on combating the laundering of drugs proceeds through the traditional financial sector. It was extended in 2001 to cover the proceeds of a much wider range of criminal activities and a number of non-financial activities and professions, including lawyers, notaries, accountants, estate agents, art dealers, jewellers, auctioneers, and casinos (see IP/01/1608).
The new proposal would ensure that the definition of money laundering includes not only concealing or disguising the proceeds of serious crimes, as defined in the framework of police and judicial cooperation between Member States, but also the financing of terrorism with either criminal or legally acquired money.
More specifically, the proposal would extend the anti-money laundering obligations to providers of services to companies and trusts and life insurance intermediaries. It would go beyond the FATF requirements in bringing within its scope all persons dealing in goods or providing services for cash payment of €15 000 or more. The proposal sets out much more detailed “know your customer” requirements and like the FATF Recommendations would introduce a risk-based approach. Those subject to the Directive would have to concentrate their efforts on the higher risk situations and should not needlessly duplicate customer identification procedures.
For the sake of clarity the existing 1991 Directive, as amended in 2001, would be repealed and replaced by a new autonomous text.
The Dutch Presidency of the Council from July to December 2004 has indicated that it will give priority to this proposal and technical discussions are due to begin imminently.
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