The European Union has started to legislate on financial crime and money laundering in 1991 with the first anti-money laundering directive (AMLD). The second AMLD was adopted in 2001 and the third AMLD in 2005.
Those directives have established rules for banks and other financial institutions as well as certain law firms to perform checks on their customers when doing business. This should help to prevent financial crime and the laundering of money from other criminal acts.
The Panama Papers have however made abundantly clear that the framework did mostly fail to achieve its objectives. Already in 2014, after a long struggle, a fourth AMLD was adopted for which national member states have until June 2017 to implement it in their national law. Because of the opposition of several member states – notably Germany – the 4th AMLD still did not include necessary transparency provisions which would allow to see who the real owners of offshore companies and trusts are.
After the Panama Papers revelations, the European Commission made a new proposal to bring more transparency to the system. It does however still leave too many loopholes. We document those in a briefing by our shadow rapporteur Fabio De Masi from November 2016. Based on this analysis, GUE/NGL has submitted a wide range of proposals how to improve the directive and ensure stronger anti-money laundering rules.
The Panama Papers Committee of Inquiry will be pivotal in gathering additional evidence on the problems with the EU framework against money laundering, building also public pressure for tougher rules that help prevent financial crime and shed light on the offshore world. In this context, Justice Commissioner Vera Jourova has been questioned on the EU AMLD framework at the 8 November hearing. All details for this hearing include written answers by Commissioner Jourova can be found on our event page.
Ahead of this hearing, the European Commission released a summary of the problems in member states with the implementation of the existing 3rd AMLD. This shows that there are numerous countries that did not even transpose correctly the rules which should be in place, further underlying the dual failure of too lax rules and deficient implementation and enforcement which together permit massive financial crimes to go unpunished at the moment.
In July 2017, the European Parliamentary Research Service published a study requested by the PANA Committee, on the Member States’ capacity to fight tax crimes, which picks up information from the mapping exercise conducted by the EU FIU Platform in 2016. The study is based on answers from Member States in response to a questionnaire and is very comprehensive. It examines the extent to which the provisions related to FIUs in the third Anti-Money Laundering Directive – that were to be implemented by the Member States by 15 December 2007 – have been properly implemented. The four countries under examination are Canada, France, Switzerland and the UK.