Money laundering is the practice of “legitimising” the proceeds of crime by filtering them into the regular economy to disguise their illegal origin. Given the importance of EU anti-money laundering policy and the role of the banking sector, we assessed whether the EU’s actions in this area are well implemented.

We found institutional fragmentation and poor co-ordination at EU level when it came to actions to prevent money laundering and take action where risk was identified. EU bodies have limited tools to ensure sufficient application of AML/CFT frameworks at national level. There is no single EU supervisor, the EU’s powers are split between several bodies and co-ordination with Member States is carried out separately.

A European Court of Auditors report says the EU requires legislation to be implemented coherently at member state level if it is to adequately tackle money laundering and terrorist financing.

A special report from the European Court of Auditors published on Monday has concluded that the EU’s efforts to combat money laundering and terrorist financing is fragmented, poorly coordinated and shows weaknesses. It fails to ensure a coherent approach and a level playing field.

“EU-level weaknesses with regard to money laundering and terrorist financing need to be addressed, and the EU’s supervisory role significantly strengthened”, said Mihails Kozlovs, the member of the European Court of Auditors responsible for the report. “Much more needs to be done to ensure that the EU law is implemented promptly and coherently. For a start, the EU should use regulations in preference to directives wherever possible, given the need for legislation to be implemented coherently at Member State level”…..
Special Report: EU efforts to fight money laundering in the banking sector are fragmented and implementation is insufficient.