With a decision taken on 10 July 2020, the MEPs voted and affected the Commission’s Action Plan, an effective fight against money laundering and terrorist financing. This plan highlighted the changes needed to achieve an efficient EU framework.
What Are The New Measures?
Within the scope of the Commission's Action Plan decisions, MEP members stated that they would not allow the wrong and irregular implementation of Anti Money Laundering (AML) and Combating the Financing of Terrorism (CTF) legislation. The plan also stated that, under national law rules, it would be intolerant not only to member states that do not comply with AML / CTF legislation but also to countries that do not comply with the legislation promptly. Member states' law enforcement agencies should cooperate more and increase information sharing to prevent possible money laundering activities more quickly.
In contrast, MEPs approve the proposal's acceptance to establish a support mechanism for the Financial Intelligence Units (FIU). Thus, it will be possible to share information with the Member States and support cross-border cases. The Commission's Action Plan is thought to apply not only to banks but also to SMEs and other organizations in the future. In the field of AML / CTF, the Commission welcomes its intention to provide a single rule book to provide a more harmonized set of rules in the fight against money laundering and terrorist financing. MEPs propose that the Commission's scope of this regulation should consider the following factors:
- Identify Ultimate Beneficial Ownership (UBO)
- List of liable institutions and reporting obligations
- Customer Due Diligence (CDD) requirements, including those related to Politically Exposed Persons (PEP)
- Valuable property records and central mechanisms on bank accounts
- Standards for auditing organizations that have both financial and financial obligations
Effective Use of Quality Data
The European Parliament Commission aims to identify the ultimate beneficial ownership by establishing high-quality records with high data protection standards. Thus, it aims to address the lack of quality data in the ongoing process. It also wants MEPs The Commission's Action Plan to be expanded to include new market sectors such as crypto assets. Thus, the activities of financial offenders, who benefit from the lack of regulations in this field, such as money laundering and terrorist financing, can be prevented or reduced.
Members of the European Parliament state that non-cooperating jurisdictions and high-risk third countries should be blacklisted without tolerance when cooperating with reformers. This plan encourages non-cooperative jurisdictions and high-risk third countries to comply with the plan.
Harmonizing Sanctions
MEPs will facilitate recognizing the returning crime assets across borders and demand mutual recognition of confiscation orders to ensure rapid cross-border cooperation after recognition. The European Central Bank is expected to withdraw licenses from banks in the Eurozone that violate AML / CTF obligations.
In the decision taken, the MEPs state that it is necessary to focus on corruption and money laundering offenses and other reported scandals such as Panama Papers, Lux Leaks, and Paradise Papers, as well as transparent financial and tax systems. If it focuses only on traditional money laundering crimes, other crimes cannot be identified, so it is important to prevent them. On the other side, there is a point that should be considered; this plan also highlighted the contributions of international investigative journalism in exposing possible crimes.