By Elizabeth Hearst & Alisha Houlihan
The Deputy Director of the European Commission’s DG FISMA has warned that Europe may see “even more illegal activity” in the future, as a result of current geopolitical events.
Speaking at the AML Intelligence Public Private Partnership’s Summit, Ms Jour-Schroeder admitted that further illegal activity in the bloc could be on the cards, resulting from Russia’s invasion of Ukraine.
“The EU system is possibly one of the most developed AML systems world-wide, but it is also fair to say that it is not completely fit for purpose, as we have it today,” admitted Ms Jour-Schroeder, adding that: “We have had too many big money laundering cases.”
“At the same time, we see a lot of technological changes in the financial sector, which is good because we want innovation and modern systems in finance, but there is also a risk that criminals who want to move illicit funds make unlawful use of these new developments,” she said.
She stressed that the EU needed to “work further” on the definitions of obliged entities as important gatekeepers in the financial system, and revealed that regulators were “mainly looking – but not only – at crypto assets.”
“Crypto assets can be a very promising means of payment, but there certainly is a risk they are used for illicit purposes, so we have to close these gaps,” said Ms Jour-Schroeder.
She revealed that the EU would need to “work further on the rules on customer due diligence”, and would have to take into account the transition to a more digital world.
Speaking about beneficial ownership, Ms Jour-Schroeder said the Commission was “very pleased” that FATF had taken up work on beneficial ownership, but she warned that “what we have is still not sufficient.”
“We see it in the context of the imposition of sanctions following Russia’s aggression, it is always very difficult to identify who is the real person behind. This is definitely something we have to work on,” she added.
The Deputy Director General praised Financial Intelligence Units (FIUs) as “one of the most important angles we have in our toolbox to fight money laundering,” adding that they play a “key role” in tackling illicit finance.
She announced that making FIUs “even more operational” is one of the primary objectives of the Commission’s package, adding that FIUs would have the power to suspend the use of bank accounts when there is suspicion that activities are linked to illicit activities.
She explained that negotiations on the EU AML Package in Brussels are in “full swing” with Member States and the European Parliament, adding that she was “optimistic” that the Commission and stakeholders would reach a “good agreement”, but conceded that “there is still work to be done… to bring all different ideas together.”
Ms Jour-Schroeder revealed that the Commission hopes to facilitate the agreement before the end of the year, but admits this is “ambitious but not impossible.”
Speaking on Public-Private Partnerships, she stressed it was a “very important topic.”
“We are moving forward in our work to do a guidance note on the rules applicable to the use of Public-Private Partnerships in the context of preventing money laundering and terrorist financing,” she added.
“An effective exchange of information is crucial in this context not only between public authorities and financial intelligence, but perhaps even more between the private and public sector,” said Ms Jour-Schroeder.
She concluded that “Public-Private Partnerships do not replace the existing Anti-Money Laundering framework, but they can complement national efforts in this area, and provide additional support to authorities and the finance sector.”
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