Position paper on European supervisory mechanism for AML

Article
NL Law
Expertise
Criminal Law and Enforcement Financial Regulation
On 8 November 2019, the Dutch Minister of Finance sent a joint position paper to the Dutch Parliament regarding the need for a European AML supervisor (Anti-money laundering). The paper was prepared by the Ministers of Finance of Germany, France, Italy, Spain, Latvia and the Netherlands. A short summary of the paper is set out below. For more information on the broader plans of the Dutch government to combat money laundering, we refer to our previous newsletters of 1 July 2019 and 17 October 2019.

The six EU Member States write that money-laundering scandals throughout the EU have affected the integrity and reputation of the European financial sector. In addition to harmonised regulations, there is a need for a harmonised supervision, for the following reasons:

  1. shortcomings in one Member State can affect another;
  2. international cooperation and exchange of information between supervisors is often complex;
  3. information exchange between AML supervisors and prudential supervisors is unnecessarily complicated;
  4. resources are often limited; and
  5. other interests (e.g., supervised institutions or interest groups) may influence investigations or enforcement.

This type of EU joint supervision should, according to the six Member States, cover all financial institutions that fall under the scope of the Regulation governing the formation of the European supervisory authorities (e.g., banks, investment firms, insurance companies, pension funds) and the Fourth Anti-Money Laundering and Anti-Terrorism Financing Directive.

The six Member States continue to state that the EU central supervisor should mainly be focused on high-risk financial institutions or situations where national supervision has apparently been insufficient or inappropriate. The central European supervisor should also have the power to direct specific instructions to national authorities in respect of individual institutions, and ultimately, to bring such individual institutions under its direct supervision.

The plans set out in this paper have not yet resulted in proposals from the European Commission, Council or the European Parliament for new EU legislation. It is uncertain whether this will be the case. In any case, it seems that there is growing support for this idea within the EU.

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