EU: The Perspective of the European Commission
| Pages | 163-173 |
| DOI | https://doi.org/10.1108/eb027183 |
| Date | 01 April 1998 |
| Published date | 01 April 1998 |
| Author | Paolo Clarotti |
| Subject Matter | Accounting & finance |
Journal of Money Laundering Control —
Vol.
2 No. 2
EU:
The Perspective of the European Commission
Paolo Clarotti
The European directive on the prevention of
money laundering was adopted on 10th June,
1991,1
and has been in force from 1st January,
1993 (even if not all the Member States have
implemented it within the scheduled deadline and
there is still an infringement case before the Euro-
pean Court of Justice in Luxembourg).
The problem elaborated in this article is to what
extent the present European Union (EU) directive
is still an adequate instrument for the prevention
of money laundering by the financial systems of
the present and future EU Member States, and
what could be the role of the European Commis-
sion in this respect.
THE THIRD PILLAR
There is an important anti-money laundering
action in the European Union in the framework of
the so-called third pillar provided for by the Maas-
tricht Treaty and which is not under the Commis-
sion's right of initiative, but which is dealt with
directly by the EU Member States, through their
cooperation. There is a High Level Working Party
on Drugs and Organised Crime, and the so-called
European Drugs Unit, which is a sort of fore-
runner to Europol, the police coordination agency
which has been officially activated on 1st October,
1998.
Coordination of all these efforts has become
a major challenge for the EU Member States.
There is also the High Level Task Force on organ-
ised crime which was set up at the Dublin Summit
in 1996 and which has reported to the Amsterdam
Summit of June 1997. Some of its conclusions
refer to money laundering, and particularly action
point 26 which has been approved. It deals mainly
with international cooperation in order to prevent
money laundering and confiscate proceeds of such
a crime (see Annex I). But the European Commis-
sion is only an observer in this context and will
not be examined here, because among other
things, the proceedings of the above third pillar
bodies are largely confidential.
The main event in these last years, as regards the
directive and its implementation has, of course,
been the adoption by the European Parliament in
June 1996 of its opinion and resolution on the
Commission's report of March 1995.2 The fact
that Parliament took a long time to deliver its
opinion shows that the discussion was very diffi-
cult. The main elements of the final parliamentary
resolution on the Commission report on the
implementation of the money laundering directive
are explained below.
AN INADEQUATE SYSTEM
The European Parliament after having consulted
many experts on a world-wide basis, and having
ascertained that financial transactions connected
with criminal activities were continuing, has
expressed the opinion that the EU's system for
combating money laundering was not adequate
enough and did not cater sufficiently for the new
forms of financial transaction. In particular they
required the following actions:
— to ensure full transposition of the directive and
submit within the next two years a detailed
report indicating the number of transactions
reported, the number of proven cases of money
laundering, the number of people convicted and
the amounts confiscated. As regards the infor-
mation required by the European Parliament,
the Commission has asked Member States for
these data;
— to report on new types of money laundering
arising from changes in business practices and
money transfers, and to submit appropriate pro-
posals for combating it as part of a revision of
the directive. On this point the Commission
could avail itself of the FATF's3 excellent work
on such typologies;
— to submit a proposal for a revision of the direc-
tive as quickly as possible, and not later than
6th March, 1998, to include within the direct
scope of the directive those occupations and
types of enterprise which can definitively be
considered to be involved or likely to be
involved directly or indirectly in money laun-
dering. The problem is that some Member
States are of the opinion that Article 12 is
already sufficient in that respect.
Page 163
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