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FIU Reports: Clarifying the Scope and Exchange of Information

The Financial Intelligence Unit (FIU) plays a crucial role in combating money laundering and terrorist financing by collecting and analyzing financial information. However, FIUs should not only rely on reports from obliged entities but also have the authority to obtain information through other means, such as their own analysis or intelligence provided by competent authorities.

Requesting Information

According to recent guidelines, FIUs can request information from obliged entities based on sufficiently defined conditions. This allows them to gather essential data for identifying suspicious transactions and underlying criminal activity. Moreover, FIUs should be able to exchange information with other EU FIUs upon request.

Exchange of Information: Overcoming Challenges

Despite these efforts, challenges still arise in exchanging information between FIUs. Differences in national definitions of predicate offenses, such as tax crimes, can hinder cooperation. To overcome this, FIUs must rapidly and constructively ensure the widest range of international cooperation with third countries’ FIUs.

Prudential Supervision: Collaboration and Confidentiality

Information on prudential matters, such as fitness and properness of directors and shareholders, is essential for AML/ CFT supervision. Collaboration between AML/CFT competent authorities and prudential supervisors should not be hampered by legal uncertainty. Clarification of the legal framework is crucial, especially when prudential supervision involves cross-border transactions.

Accurate Identification: The Role of Technology

Accurate identification and verification of data are vital for fighting money laundering or terrorist financing. Digitalization has enabled secure remote identification methods, such as electronic identification schemes recognized by Regulation (EU) No 910/2014. FIUs should take these advancements into account when verifying identities.

Politically Exposed Persons: Identification and Monitoring

To identify politically exposed persons in the EU, Member States must issue lists indicating specific functions that qualify as prominent public functions. International organizations accredited on their territories should also provide such lists.

Review of Existing Customers: Risk-Based Approach

The current risk-based approach for reviewing existing customers may not be effective in detecting higher-risk transactions associated with certain intermediary structures. Therefore, FIUs should monitor clearly specified categories of existing customers on a regular basis.

Beneficial Ownership Information: Accurate and Up-to-Date Registration

Accurate and up-to-date information on beneficial ownership is crucial for tracing criminals behind corporate structures. Member States must ensure that corporate entities hold adequate, accurate, and current information on their beneficial owners. The specific factor determining which Member State is responsible for monitoring and registering beneficial ownership information of trusts and similar legal arrangements should be clarified.

Conclusion

The effective fight against money laundering and terrorist financing requires a coordinated effort from FIUs, obliged entities, and other stakeholders. By clarifying the scope and exchange of information, ensuring cooperation between prudential supervisors, utilizing technology for accurate identification, and monitoring beneficial ownership, we can strengthen our defenses against these financial crimes.