The main bodies of the European Union have agreed on new legislation outlining criminal offences and sanctions regarding money laundering, part of a directive aimed at combating financial crime across the bloc.
Currently, the differences between EU countries in defining and sanctioning money laundering offences affects cross-border police and judicial cooperation and can be exploited by criminals and terrorists, officials say.
The final compromise between the Council of the European Union and the European Parliament has established that money laundering activities will be punishable by a maximum term of imprisonment of four years.
Additional sanctions and measures may also be imposed by judges together with imprisonment, such as temporary or permanent exclusion from access to public funding.
Legal entities will also be held liable for certain money laundering activities and can face a range of sanctions, for example exclusion from public aid, placement under judicial supervision, judicial winding-up, etc.)
“Aggravating circumstances will apply to cases linked to criminal organisation or for offences conducted in the exercise of certain professional activities,” a Council statement explained, “member states may also define such aggravating circumstances on the basis of the value of the property or money being laundered or of the nature of the offence[for example, corruption, sexual exploitation, drug trafficking and so on].”
With the agreement now in place, the actual text will now undergo linguistic revision before formal adoption by the Council and Parliament.
Member states will then have up to 24 months to transpose the new provisions into national law.
Vladislav Goranov, minister for finance of Bulgaria, which currently holds the Council presidency, said: “These new rules respond to the need for increased security in Europe by further removing the means available to terrorists.”
“They will enable us to disrupt criminal networks without compromising fundamental rights and economic freedoms.”
The EU says it is stepping up efforts to crack down on dirty cash and illicit financial flows funding criminals and terrorists.
According to the European Commission, the proceeds from criminal activity in the EU are estimated to be €110 billion per year, corresponding to 1% of the EU’s total GDP.
The number of money laundering cases in the EU has been growing, officials say. According to Europol there were 148 money laundering cases in 2012, 202 in 2013, 221 in 2014, and 285 in 2015.