At the end of a report on anti-money laundering (AML) scandals involving EU credit institutions, the European Commission announces the plan to transform the Anti-Money Laundering Directive (AMLD) into a Regulation. An explanation why criticism in regard of credit institutions is a reason for amending AML legislation for all companies is not given.
It shows that inadequately implemented rules for credit institutions may lead to an additional regulatory burden for the many other companies that have anti-money laundering obligations.
Worrying is that the Commission in its report does not pay any attention to the practical aspects of organising AML-compliance. E.g. is there nothing on the IT-challenges in regard of transaction monitoring and customer due diligence, neither is the Commission interested if it is possible to have enough qualified personnel, or in the costs of AML-compliance. New forms of discrimination that are caused by KYC, are neglected.
My impression is that the Commission is much too optimistic about what credit institutions are able to accomplish.
Sector organisations are advised to read the report carefully, comment on it, monitor the development of EU-plans around AML very carefully and to respond in time to ill-founded proposals.
PS That even credit institutions have grave problems with implementing AML-legislation, should be a sign that Europe asks something impossible from companies. Of course the Commission buries its head in the sand and repeats the AML-mantras, instead of convincing FATF it is taking the wrong direction and completely revising the system.
- Report of 24 July 2019, from the Commission to the European Parliament and the Council on the assessment of recent alleged money laundering cases involving EU credit institutions.
- Press release of 24 July 2019, Fight against money laundering and terrorist financing: Commission assesses risks and calls for better implementation of the rules, referring to several documents, including the report, SNRA-2, Financial Intelligence Unit report and report on the interconnection of central bank account registries, all found here.
The dark side of AML:
- Enhancing access to ﬁnancial information by law enforcement | EC announcement of 24 July 2019; RDW data breach, article on this blog, 25 July 2019.
- De lawine van regels in de witwasbestrijding | Wwft, article on this blog, 25 July 2019.
- DNB maakt mislukking Wwft bekend, article on this blog, 26 April 2019.
- The Critical Handbook of Money Laundering by P.C. van Duyne, J.H. Harvey and L.Y. Gelemerova, on the website of Van Duyne.
Further AML reading on this blog: