Cooperation between Financial Intelligence Units in the European Union: Stuck in the middle between the General Data Protection Regulation and the Police Data Protection Directive
| Published date | 01 September 2020 |
| Date | 01 September 2020 |
| DOI | http://doi.org/10.1177/2032284420943303 |
| Subject Matter | Special Issue Articles |
Special Issue Article
Cooperation between
Financial Intelligence Units
in the European Union: Stuck
in the middle between the
General Data Protection
Regulation and the Police Data
Foivi Mouzakiti
Royal Holloway University of London, UK
Abstract
Financial Intelligence Units (FIUs) hold a central position in the chain of actors responsible for the
monitoring of money movements in the European Union. In support of their role, which is to
receive, analyse and disseminate suspicious transaction reports, they have been furnished with
significant information processing powers. At present, FIUs feature prominently in the EU’s anti-
money laundering and counterterrorist financing agendas and plans to further enhance their
powers of information exchange are underway. At the same time, however, the legal challenges
that arise from their constant empowerment, particularly for the protection of personal data, are
being overlooked. This article focuses on the cooperation between FIUs in the EU and argues that
the latter takes place under a complex legal framework, which raises significant challenges for data
protection. In particular, it highlights the present-day uncertainty over the data protection
framework that governs their operations and discusses whether FIUs should be subject to the
General Data Protection Regulation or to its law enforcement counterpart, the Police Data
Protection Directive. The remaining of the article focuses on the ‘FIU.net’ – the decentralized
network for information exchanges between EU FIUs – and on the data protection challenges that
emerged from the recent integration of this network into Europol.
Keywords
Financial Intelligence Units, data protection, GDPR, Police Data Protection Directive, anti-money
laundering, counter-terrorism financing
Corresponding author:
Foivi Mouzakiti, Lecturer in Law, Royal Holloway University of London, Egham Hill, Egham TW20 0EX, UK.
E-mail: Foivi.mouzakiti@rhul.ac.uk
New Journal of European Criminal Law
2020, Vol. 11(3) 351–374
ªThe Author(s) 2020
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DOI: 10.1177/2032284420943303
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Organized crime, corruption and fraud (to name a few) generate significant amounts of wealth. We
are all familiar with the occasional movie scene, where a renowned drug dealer resorts to burying
thousands upon thousands of banknotes in their yard but, as useful as that may be for hiding the
money, it is of little help when one wants to spend it. Criminals who accumulate wealth cannot
safely enjoy the proceeds of their efforts unless they ‘launder’ it first. In other words, they need to
disguise the illegalorigin of their proceeds; or else,they will attract the attention of law enforcement.
The good news for those who are trying to launder their money is that, in the modern globalized
world, money flows across borders with the touch of a button. They have plenty of opportunities to
integrate theirillicit proceeds into the financialsystem and successfully distance theirfunds from the
underlying crime. For law enforcement officials, however, those who are on the trail of ‘dirty’
money, this is anything but good news. Money travels easily, but they do not. As such, the raison
d’ etre of anti-money laundering (AML) regimes around the world, largely modelled on the Rec-
ommendations of the Financial Action Task Force (FATF), is to make movements of moneyvisible
and therefore enable law enforcement to trace them.
The European Union (EU) entered the AML race in 1991, with the adoption of a Directive ‘on
the prevention of the use of the financial system for the purpose of money laundering’.
1
More
than two decades and five Directives later,
2
the EU’s AML regime has evolved significantly –
always in line with the FATF Recommendations.
3
To make money movements traceable, the
regime introduced a series of preventative measures, largely based on the collection of infor-
mation by the regulated sector; perhaps, the most drastic among them is the obligation to report
suspicious transactions. This led to the emergence of institutional machinery,
4
which is respon-
sible for undertaking and managing the surveillance of money movements at a national level.
5
Partly because of the preventative nature of this regime and partly because the EU lacked
competence in criminal matters at the time,
6
this was not assigned to the ‘traditional’ policing
1. Council Directive 91/308/EEC of 10 June 1991 on prevention of the use of the financial system for the purpose of money
laundering, [1991] OJ L 166/77 (First AML Directive).
2. First AML Directive;Directive 2001/97/EC of the EuropeanParliament and of the Council of 4 December 2001amending
Council Directive 91/308/EEC on Prevention of the use of the Financial system for the Purpose of Money Laundering,
[2001] OJ L 344/76(Second AML Directive); Directive 2005/60/ECof the European Parliament andof the Council of 26
October 2005 on the Prevention of the use of the Financial System for the Purpose of Money Laundering and Terrorist
Financing (Text with EEA relevance), [2005] OJ L 309/15 (Third AML Directive); Directive (EU) 2015/849 of the
European Parliament and of the Council of 20 May 2015 on the Prevention of the use of the Financial System for the
Purposes of Money Laundering or Terrorist Financing, amending Regulation (EU) No 648/2012 of the European Par-
liament and of the Council, and Repealing Directive2005/60/EC of the European Parliament and of the Council and
Commission Directive2006/70/EC (Text with EEA relevance), [2015]OJ L 141/73 (Fourth AML Directive); Directive
2018/843 of the European Parliament and of the Council of 30 May 2018 amending Directive (EU) 2015/849 on the
Preventionof the use of the Financial System forthe Purposes of Money Laundering or TerroristFinancing, and Amending
Directives 2009/138/EC and 2013/36/EU, [2018] OJ L 156/43 (Fifth AML Directive).
3. Valsamis Mitsilegas and Niovi Vavoula, ‘The Evolving EU Anti-Money Launderign Regime: Challenges for Funda-
mental Rights and the Rule of Law’ (2016) 2 Maastricht Journal of European and Comparative Law 261.
4. Ben Bowling and James Sheptycki, Global Policing (Sage, 2012) 69–70.
5. Anthony Amicelle and Gilles Favarel-Garrigues, ‘Financial Surveillance: Who Cares?’ (2012) 5 Journal of Cultural
Economy 105. Terence Halliday, Michael Levi, and Peter Reuter, ‘Global Surveillance of Dirty Money’ (Center on Law
and Globalization, 2014), c.uk/88168/1/Report_Global%20Surveillance%20of%20Dirty%20 Mon
ey%201.30.2014.pdf> accessed 19 June 2020.
6. Commission, ‘First Commission’s report on the implementation of the Money Laundering Directive (91/308/EEC) to be
submitted to the European Parliament and to the Council’ COM (95) 54 final, 13-14, 16 -17.
352 New Journal of European Criminal Law 11(3)
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