Fighting money laundering: the changes to the EU’s policies

As the EU focuses its attention on the fight against money laundering, a new review into the competency of European bodies for banks, markets and insurance has led to changes in the blocs current legislation.

The growing number of money laundering scandals in Europe is a cause for concern. Because of this, the European Banking Authority (EBA) will be given new powers to strengthen its efforts in the fight against money laundering and the funding of terrorism.

Some of the recent scandals include Swedbank, which recently fired its CEO over a €135 billion money scandal, and Danske Bank, which was accused of laundering €200 billion.

The review looked at the effectiveness of the European supervisory bodies for banks (EBA), markets (European Securities and Markets Authority-ESMA), and insurance (European Insurance and Occupational Pensions Authority-EIOPA).

Following this, recommendations on changes to the Commission’s current policies were published in a report.

The changes rules will be introduced in Europe later this month, and will include the following changes:

  • Going forward, a team of ten people in the EBA will be dedicated to tackling money laundering;
  • This team will review the policies of national authorities and can recommend they conduct investigations, as well as being able to recommend the right sanctions;
  • There will be new common standards across all member states;
  • The EBA will set up information hubs for national authorities;
  • In order to protect European consumers from the dangers of illegal financial products, the EBA will carry out mystery shopping in member states. This could result in a six month ban on any products that are found to be fraudulent.

The Commission has welcomed the changes to the policies. In an interview, a spokesperson commented that the move is a  “step forward”, that will be introduced across the EU provided it gets the approval of all member states.

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