March 20, 2019

Commission calls for EU crackdown on money laundering

EU watchdogs should get greater clarity on the powers to strip lenders of their banking licenses if they are found to be in breach of money-laundering rules, the European Commission said.

The EUs executive arm made the call in a letter — obtained by POLITICO — to the blocs three watchdogs and the European Central Bank, signed by Vice President Valdis Dombrovskis, his Dutch peer Frans Timmermans and Justice Commissioner Věra Jourová.

The letter stresses the need to strengthen the prudential oversight by the blocs financial supervisors to curb money laundering, following a string of money-laundering scandals in the eurozone this year in countries like Latvia, Estonia and Malta.

The scandals have led to bank closures and arrests and in the countries. But its mainly been U.S. authorities that have driven the crackdown, much to the embarrassment of the ECBs supervisory arm.

The Commission in response called on the four supervisors “with some degree of urgency” to work closely with its own services “to improve the practical coordination of [anti-money laundering] supervision.”

A timetable for action should be ready “before the end of July,” the letter said.

Speaking at POLITICOs Brussels Playbook Breakfast on Tuesday, Dombrovskis, who is a former prime minister of Latvia, said: “What we see is that theres clear interaction between prudential supervision and anti-money laundering issues — we have seen how quickly money laundering can turn into financial issues … we now need to draw lessons from those cases.”

Original Article

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