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Money launderers are taking EU to the cleaners, experts say
PARIS, Sept 30, 2018 (BSS/AFP) – European Union nations may boast the
world’s most stringent anti-money laundering rules, but recent scandals show
that criminals are good at exploiting the bloc’s Achilles’ heel: A patent
lack of coordination.
“There are problems relating to coordination at various levels: at the
national level, between prudential and anti-money laundering institutions,
and between states and the European Union,” said Laure Brillaud at
Transparency International EU.
Denmark, seen widely as a beacon in the global fight against corruption
and fraud, was thrust into the spotlight when an inquiry found that probably
many billions of euros were laundered through the Estonian branch of the
Scandinavian country’s biggest lender, Danske Bank.
– ‘Suspicious’ –
According to the probe, “a large part” of transactions totalling 200
billion euros ($235 billion) at that branch were “suspicious”.
A big chunk of the allegedly laundered funds came from Russia, while the
second-biggest group of non-resident customers were UK corporate entities.
Britain has announced a probe into the activities of these companies.
Also this month, Dutch banking giant ING axed its top financial officer
following a scandal over the firm’s failure to vet clients for potential
money laundering activities.
In March, Malta’s financial services watchdog froze the assets of Pilatus
Bank after the bank’s chairman was arrested for allegedly circumventing US
sanctions in Iran.
And in February, US authorities accused Latvia’s third-largest lender ABLV
of large-scale money laundering with connections to North Korea’s nuclear
weapons development programme.
Other European banking giants, including HSBC, Societe Generale and BNP
Paribas have been fined millions of dollars in recent years for failing to
put in place sufficient anti-money laundering controls.
“It’s a good sign that these cases are coming to light, but it remains a
concern that the United States has to flag the problem,” said Brillaud at
Transparency International EU.
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– No match –
The EU’s parliament in August adopted a new anti-money laundering
directive, a move the European Commission said would “bring more transparency
to improve the fight against money laundering and terrorist financing across
the European Union”.
But experts say the EU’s efforts are simply no match for criminals who
have seen through the lack of a centralised authority tasked with fighting
fraud across the bloc.
Emile Legroux of the Paris-based consulting group Mazars said that while
the new EU directive aims to harmonise efforts across the bloc, differences
between member states’ legal structures mean there are bound to be gaps in
implementation.
“Some countries implement the European directive in a very theoretical
way… while others like France take a very practical approach,” Legroux
said.
“The first problem relates to rule implementation; then there is a concern
over the EU’s follow-up not just of whether the directive has been
implemented into law, but also that the law is actually applied,” said
Brillaud.
Banks need to carry out routine checks to ensure there is no suspicious
activity, and they need to immediately inform the authorities of any areas of
concern, she recommended.
Earlier this month, the European Commission said that as part of its anti-
money laundering efforts it wants to strengthen the European Banking
Authority, which is set to move its headquarters from London to Paris because
of Brexit.
Concerns remain, however, that the EBA may not be equipped to get the job
done.
BSS/AFP/HR/1130