The European Commission yesterday released a proposal to further strengthen the European Union’s defences against money laundering and terrorist financing, under a updated and improved anti-money laundering Directive.
In a release from Brussels, the Commission said money laundering would be defined as concealing or disguising the proceeds of a wider range of serious crimes. The proposal also would ensure “coherent application” in all Member States of the latest Recommendations of the Financial Action Task Force (FATF). These Recommendations now extend to the financing of terrorism.
Internal Market Commissioner Frits Bolkestein said: *“The fight against money laundering and terrorist financing is a top political priority for the Commission. Since the first Directive of 1991, the Community has been at the forefront of international efforts to combat the laundering of the proceeds of crime. Massive flows of dirty money can damage the stability and reputation of the financial sector and threaten the single market, while terrorism shakes the very foundations of our society”*. According to the Commissioner, The EU Directive must match the standard set by the FATF’s Recommendations.
A specific provision of the proposal extends the anti-money laundering obligations to providers of services to companies and trusts and life insurance intermediaries. Brussels said, *”It would go beyond the FATF requirements in bringing within its scope all persons dealing in goods or providing services for cash payment of €15 000 or more. The proposal sets out much more detailed “know your customer” requirements and like the FATF Recommendations would introduce a risk-based approach. Those subject to the Directive would have to concentrate their efforts on the higher risk situations and should not needlessly duplicate customer identification procedures.”*
The proposal is to be forwarded to the European Parliament and the EU’s Council of Ministers for adoption. The Dutch Presidency of the Council (July to December 2004) has indicated that it will give priority to this proposal, with technical discussions scheduled to begin imminently.