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Audit preview: The EU’s anti-money laundering policy in the banking sector

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11/06/2020

Money laundering is the means by which criminals seek to distance criminal proceeds from their source, and in doing so legitimise those proceeds. The annual financial flows due to money laundering are estimated at trillions of euros worldwide, and hundreds of billions within the EU. Most of these sums pass at some stage through the banking system. As terrorist organisations are also funded using techniques similar to money laundering, measures to combat money laundering and terrorist financing use similar policy tools.

The EU has had an anti-money laundering (AML) directive in place since 1991. The directive has been updated four times, most recently in 2018. Despite extensive international cooperation and increasingly sophisticated EU legislation, money laundering remains a significant issue. The Commission, the key player at EU level, has the role of developing and enforcing AML rules in close cooperation with the European Banking Authority and the relevant authorities in the EU Member States. It is the responsibility of the Member States to apply and enforce the AML rules by enacting them in national legislation and prosecuting money laundering offences.

In the context of renewed emphasis by the Commission, the Council and the Parliament on the need to review and consolidate the EU’s policy and practice on AML and combating the financing of terrorism, the European Court of Auditors has launched an audit of the effectiveness of the EU’s efforts to combat money laundering in the banking sector. We will focus on the transposition of EU legislation in Member State law, the management of risks to the internal market, coordination among national and EU supervisory bodies, and the EU’s action to remedy breaches of its AML law at national level.

If you wish to contact the audit team, you may do so at the following email address: ECA-AML-Audit@eca.europa.eu.