12 September 2018

State of the Union 2018 – Stronger anti-money laundering supervision for a stable banking and financial sector

On the occasion of his State of the Union Address, President Jean-Claude Juncker said: "Europeans expect a Union that protects them. Today, we propose measures to allow us to fight money laundering more effectively across borders."

While the EU has strong anti-money laundering rules in place, recent cases involving money laundering in some EU banks have raised concerns that those rules are not always supervised and enforced effectively across the EU. This not only creates risks for the integrity and reputation of the European financial sector, but may also have financial stability implications for specific banks. As part of the broader efforts to complete the Banking Union and the Capital Markets Union, the European Commission therefore proposes today to amend the Regulation establishing the European Banking Authority (EBA) in order to reinforce the role of the EBA in anti-money laundering supervision of the financial sector. This is part of an overall strategy to strengthen the EU framework for prudential and anti-money laundering supervision for financial institutions, which the Commission is setting out in a Communication. These measures will contribute to promoting the integrity of the EU's financial system, ensuring financial stability and protection from financial crime. 

Commission Vice-President Valdis Dombrovskis, responsible for Financial Stability, Financial Services and Capital Markets Union, said: "Europe's Banking Union must be built on the highest standards of integrity. Anti-money laundering supervision has failed all too often in the EU. Today we are enabling the European Banking Authority to make sure that different supervisors cooperate and exchange information and that anti-money laundering rules are enforced effectively across EU countries. The EBA will also be entitled to request investigation into alleged breaches of the rules and will become Europe's phone number for cooperation with international partners on issues related to combatting money laundering in the financial sector."  [...]

Enhancing the role of the European Banking Authority  

The Commission is proposing to concentrate anti-money laundering powers in relation to the financial sector within the European Banking Authority and to strengthen its mandate to ensure that risks of money-laundering are effectively and consistently supervised by all relevant authorities and that the relevant authorities cooperate and share information. 

The amended Regulation will:

• ensure that breaches of anti-money laundering rules are consistently investigated: the EBA will be able to request national anti-money laundering supervisors to investigate potential material breaches and to request them to consider targeted actions - such as sanctions;

• provide that the national anti-money laundering supervisors comply with EU rules and cooperate properly with prudential supervisors. The EBA's existing powers will be reinforced so that, as a last resort if national authorities do not act, the EBA will be able to address decisions directly to individual financial sector operators;

• enhance the quality of supervision through common standards, periodic reviews of national supervisory authorities and risk-assessments;

• enable the collection of information on anti-money laundering risks and trends and fostering exchange of such information between national supervisory authorities (so-called data hubs);

• facilitate cooperation with non-EU countries on cross-border cases;

• establish a new permanent committee that brings together national anti-money laundering supervisory authorities. 

Making full use of existing supervisory tools 

The Commission is also presenting a strategy to improve information exchange and cooperation between prudential and anti-money laundering authorities. It invites the European Supervisory Authorities, and in particular the EBA, to adopt guidancesupporting prudential supervisors in integrating anti-money laundering aspects into their various tools and ensuring supervisory convergence. 

The Commission also invites the European Central Bank to conclude with anti-money laundering supervisors a multilateral memorandum of understanding on exchange of information by 10 January 2019 – as required by the fifth Anti-Money Laundering Directive. [...]

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© European Commission