Even though the value of suspicious transactions within Europe is estimated to be in the hundreds of billions of euros, the EU has a fragmented approach to preventing and countering money laundering and terrorist financing. Although the relevant EU bodies have a policy-making and coordinating role and limited direct powers, efforts are largely managed at national level. A special report from the European Court of Auditors (ECA) concludes that EU-level action to combat money laundering and terrorist financing has weaknesses, and that the EU’s oversight framework is fragmented and poorly coordinated and thus fails to ensure a coherent approach and a level playing field.
Money laundering is the practice of legitimising the proceeds of crime by filtering them into the regular economy to disguise their illegal origin. Within Europe, Europol estimates that the value of suspicious transactions is equivalent to about 1.3 % of EU GDP. Across the globe, the figure is estimated to be close to 3 % of world GDP. Recent data shows that over 75 % of suspicious transactions reported in the EU came from credit institutions in more than half of the Member States.
“EU-level weaknesses with regard to money laundering and terrorist financing need to be addressed, and the EU’s supervisory role significantly strengthened”, said Mihails Kozlovs, the member of the European Court of Auditors responsible for the report. “Much more needs to be done to ensure that the EU law is implemented promptly and coherently. For a start, the EU should use regulations in preference to directives wherever possible, given the need for legislation to be implemented coherently at Member State level”.