European Commission announces comprehensive anti-money laundering and countering financial terrorism policy

On May 7, 2020, the European Commission issued an action plan for a comprehensive European Union policy on preventing money laundering and countering the financing of terrorism (AML/CFT).  Authorities, stakeholders and citizens will have until 29 July to provide their feedback on the proposed plan.

The action plan sets forth six pillars which outline the Commission’s plan to achieve this objective:

1. Ensuring the Effective Implementation of the Existing EU AML/CFT Framework: The Commission will continue to ensure transposition and implementation of AML/CFT rules — including the cornerstone Anti-Money Laundering Directive — and, when necessary, launch infringement proceedings against EU member states.  The Commission will also monitor the capacity of member states to prevent and fight money laundering and terrorist financing and propose country-specific recommendations on the implementation of AML/CFT rules in Q2 2020.

2. Establishing an EU Single Rulebook on AML/CFT: The Commission will consider legislative proposals in Q1 2021 to deliver an AML/CFT rulebook.  The action plan highlights substantive areas that the rulebook may address, including unifying the member states’ divergent regulatory approaches, expanding the scope of sectors or entities covered by AML/CFT rules, and establishing an EU-wide interconnection of central bank account mechanisms.

3. Bringing About EU-Level AML/CFT Supervision: The Commission will consider proposals to establish an EU-level AML/CFT supervisor in Q1 2021.  The supervisor may be authorized to oversee and instruct national authorities on AML/CFT-related tasks, and coordinate with authorities outside the EU.  The supervisor’s authority may extend beyond the financial sector to cover all AML/CFT risks.

4. Establishing a Support and Cooperation Mechanism for Financial Intelligence Units (FIUs):  The Commission will consider proposals to establish an EU coordination and support mechanism for FIUs in Q1 2012, which will identify suspicious cross-border transactions, identify trends and factors to assess supranational AML/CFT risks, and enhance cooperation among authorities.  The Commission will also take over the management of the EU system for information exchange among FIUs, FIU.net, in Q4 2020 to ensure the continuous and uninterrupted functioning of the system.  

5. Enforcing EU-level Criminal Law Provisions and Information Exchange: The Commission will issue guidance on the role of public-private partnerships in sharing financial intelligence with law enforcement authorities and FIUs by Q1 2021.  The Commission will also consider options to strengthen the Anti-Money Laundering Operational Network and enhance domestic and cross-border information exchange among authorities.

6. Strengthening the International Dimension of the EU AML/CFT Framework: The Commission will continue to work with the member states and will increase its involvement in the Financial Action Task Force (FATF), an inter-governmental body that sets standards and promotes implementation of AML/CFT measures.  The action plan proposes appointing the Commission as the EU representative to the FATF.