{"id":37007,"date":"2021-07-21T11:27:25","date_gmt":"2021-07-21T09:27:25","guid":{"rendered":"https:\/\/www.w-t-w.org\/en\/?p=37007"},"modified":"2021-07-21T11:36:07","modified_gmt":"2021-07-21T09:36:07","slug":"5-reasons-money-launderers-wont-worry-about-eu-crackdown","status":"publish","type":"post","link":"https:\/\/www.w-t-w.org\/en\/5-reasons-money-launderers-wont-worry-about-eu-crackdown\/","title":{"rendered":"5 Reasons Money Launderers Won\u2019t Worry About EU Crackdown"},"content":{"rendered":"

Dirty money could still haunt the bloc even after the announcement of a new anti-money laundering watchdog.<\/p>\n\n

Brussels has set its sights on dirty money.<\/p>\n

The European Commission on Tuesday unveiled a massive package<\/a> of anti-money laundering initiatives to drive dirty money out of the bloc after repeated failures in supervision.<\/p>\n

The crowning feature of the four-pronged package is a plan to introduce a new EU anti-money laundering authority<\/a>, known as AMLA. The new EU agency should be set up within the next three years and begin direct supervision by 2026, complete with the power to issue fines worth millions of euros.<\/p>\n

But some lawmakers and think-tankers warn that the package might not be enough to snuff out illicit financiers and suspicious activity amounting to some \u20ac160 billion across the bloc<\/a>. Here are five reasons why money launders will likely be shrugging their shoulders over Brussels\u2019 initiatives \u2014 for now.<\/p>\n

1. AMLA won’t be built in a day<\/h3>\n

Tuesday\u2019s package is ambitious. The new agency is set to hire 250 people to directly supervise the bloc\u2019s riskiest financial institutions with a yearly budget of \u20ac45 million. But AMLA won\u2019t be built in a day. The watchdog is set to only begin its direct supervisory duties from early 2026. That\u2019s almost five years of the status quo, which has proved to be ineffective<\/a> at tackling dirty money.<\/p>\n

It would\u2019ve made more sense to beef up the European Banking Authority\u2019s existing powers against dirty money and improve its faulty governance structure<\/a>, according to the chief executive of Brussels\u2019 think tank the Centre for European Policy Studies, Karel Lannoo. The EBA will instead be stripped of its powers.<\/p>\n

\u201cNow there is a discontinuity and a vacuum of about two years,\u201d Lannoo said. \u201cYou will demotivate EBA from the work they\u2019ve been doing. Why should they still care\u201d in the meantime?<\/p>\n

2. The bloc still has blind spots<\/h3>\n

A series of dirty-money scandals since 2018 revealed a blind spot in the EU\u2019s supervision of banks. Governments have been interpreting the bloc\u2019s dirty-money safeguards differently for years when writing them into national law. That\u2019s left plenty of loopholes for criminals to exploit in countries that don\u2019t require all businesses, such as crowdfunding platforms and diamond dealers, to report suspicious transactions.<\/p>\n

The Commission proposed a single rulebook Tuesday that will harmonize the bloc\u2019s rules, which AMLA will police, to remedy the situation. Legislative negotiations over uniform rules can take years, however, and there are still some capitals that have yet to introduce the EU\u2019s existing rules. Brussels has been cracking down on the bloc\u2019s stragglers in recent years with threats of courts and penalties. All this takes time, too.<\/p>\n

3. Other sectors remain vulnerable<\/h3>\n

AMLA\u2019s direct responsibilities are limited to the financial industry. That means it\u2019ll still be up to governments to tackle dirty money within other sectors, such as gambling, legal services and auditing. The new watchdog will be able to take over the supervision of specific cases when and if national authorities fail to do their jobs properly. But as recent history shows in Denmark and Estonia<\/a>, it’s difficult to pinpoint where national supervisors<\/span> are asleep at the wheel.<\/p>\n

“No EU authority can supervise all anti-money laundering law enforcers, especially in the nonfinancial sector such as trade in goods, real estate, lawyers and gambling,\u201d German Green EU lawmaker Sven Giegold said. \u201cTherefore, it is still up to the member states.\u201d<\/p>\n

4. The darknet can bypass fintech rules<\/h3>\n

Finance is becoming increasingly digital. So, it\u2019s only natural that part of the Commission\u2019s AML package would include a bill that targets financial technology, too. The bill aims to introduce disclosure requirements for the buying and selling of crypto assets within the EU. That means any company or financial firm in the EU that transfers a digital asset in or out of the bloc will have to provide details on who\u2019s moving the money around.<\/p>\n

That said, the internet is global \u2014 people in Europe could still evade the disclosure rules through the darknet by finding a Chinese crypto-asset supplier to transfer funds to Russia, for example.<\/p>\n

5. Power politics \u2014 what else?<\/h3>\n

Even if EU legislators are quick to agree on common rules and the makeup of AMLA, there\u2019s a risk that location politics could delay<\/span> the watchdog\u2019s planned introduction for 2024. You can’t put a spade in the ground if capitals can’t agree on where to start building.<\/span> EU agencies come with influence and power while boosting national economies with their well-paid employees. Capitals have been willing to fight tooth and nail to secure the lucrative prize of an agency, most recently demonstrated in the EBA\u2019s move<\/a> to Paris. A deadlock could quickly emerge if a similar fight begins over AMLA \u2014 Germany\u2019s funds industry, BVI<\/a>, has already issued its rallying cry to the German government to fight for the watchdog.<\/span><\/p>\n

\u201cThe German government has to fight for Frankfurt as the location of the new European authority,\u201d Thomas Richter, BVI\u2019s CEO, said in a statement. \u201cA failure as occurred with the EBA should not be allowed to happen again.\u201d<\/p>\n

This article is part of <\/em>POLITICO\u2019s premium policy service<\/em>:\"RsManoj-Kureel-Cartoon<\/p>\n

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Dirty money could still haunt the bloc even after the announcement of a new anti-money laundering watchdog. Brussels has set its sights on dirty money. The European Commission on Tuesday unveiled a massive package of anti-money laundering initiatives to drive … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"footnotes":""},"categories":[22,13],"tags":[],"class_list":["post-37007","post","type-post","status-publish","format-standard","hentry","category-corruption","category-finance"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t