The European Commission has outlined proposals to improve the supervision of banks within the EU regarding financial crime, amid a series of money laundering scandals that have highlighted the need for change to the current system.

In recent years, the EU has introduced a number of anti-money laundering laws, but this has not stopped some of its banks from being used to facilitate money laundering.

Less than two weeks ago, ING Bank in the Netherlands was fined 775 million euros (about $900 million) over its poor anti-money laundering controls. It follows a string of incidents involving banks in a number of European states, including Malta, Latvia and Estonia.

On Wednesday, EU Commission Vice-President Valdis Dombrovskis, responsible for financial Stability, said: “Europe’s Banking Union must be built on the highest standards of integrity. Anti-money laundering supervision has failed all too often in the EU.”

Under the new plans published Wednesday, the European Banking Authority will be given more powers to ensure that breaches of anti-money laundering rules are consistently investigated.

It will also be able to request national anti-money laundering supervisors to investigate potential material breaches and to request them to consider targeted actions, the Commission said.

The plans also state that national anti-money laundering supervisors will have to comply with EU rules and cooperate properly with prudential supervisors.

“The EBA’s existing powers will be reinforced so that, as a last resort if national authorities do not act, the EBA will be able to address decisions directly to individual financial sector operators,” the Commission explained.

The plans also include the establishment of a new permanent committee that brings together national anti-money laundering supervisory authorities, but falls short of creating an EU central anti-money laundering agency which has been recommended by commentators, as well as European Central Bank board member Benoit Coeure.

– Irene Madongo


Read more:

Money laundering at Danske Bank: Lessons for financial crime professionals (Part 2)

Money laundering: ING bank fined €775m over due diligence, client on-boarding

Top skills that make a good compliance officer

HSBC ‘cooperating’ with regulators over Panama Papers’ firm Mossack Fonseca