EU Tackles Weak AML Mechanisms in Member States

Brussels Takes Action Against Financial Sector Vulnerabilities

July 15th, 2021 - The European Union has introduced new measures to counter vulnerabilities in its financial sector and safeguard the integrity of the internal market. The 5th and 6th Anti-Money Laundering (AML) Directives aim to increase transparency on company ownership and trusts, facilitate the work of Financial Intelligence Units (FIUs), and enhance cooperation among AML institutions.

Weaker AML Mechanisms Leave Member States Vulnerable

However, countries with weaker AML mechanisms are more susceptible to illicit financial flows and money laundering. According to Karel Lannoo, CEO and AML expert at CEPS, “The lack of effective AML measures in some member states creates an environment conducive to money laundering and terrorist financing.”

Collaboration Key to Preventing Money Laundering

To address this issue, the EU has emphasized the importance of cooperation between civil society, academia, and media in preventing money laundering. The recent forum organized by the Institute for Democracy and Mediation (IDM) brought together representatives from these sectors to discuss their role in countering and preventing money laundering.

Media’s Role in Exposing Corruption

While investigative journalists have made significant contributions to uncovering corruption and organized crime, their reporting has been limited due to a lack of institutional transparency and civil society’s apathy towards inquiring and reporting on such issues. According to Kristina Voko, BIRN representative, “The media should give voice to the academia and organizations, while the latter should be more proactive in their relationship with the media.”

Civil Society’s Call for Proactive Government Approach

Civil society organizations have also emphasized the need for a more proactive approach from the government in tackling money laundering. Zef Preçi, head of the Albanian Center for Economic Research (ACER), noted that “the government usually displays an emotional approach to these issues instead of following a proactive and rational approach.” He added that this leads to few actions being undertaken to tackle money laundering.

EU’s New Measures Aim to Strengthen Cooperation

The EU’s new measures aim to strengthen cooperation between member states and ensure that all countries have effective AML mechanisms in place. The 5th and 6th Anti-Money Laundering Directives will require member states to implement stricter regulations on company ownership, trusts, and financial institutions, as well as enhance cooperation among FIUs.

Multidisciplinary Approach Crucial for Success

The IDM’s event highlighted the importance of a multidisciplinary approach to preventing money laundering and emphasized the need for civil society, academia, and media to work together to counter this threat. As the EU continues to tackle money laundering, it is crucial that all stakeholders play an active role in ensuring the integrity of the financial system.

Conclusion

The EU’s new measures aim to strengthen cooperation among member states and ensure that all countries have effective AML mechanisms in place. It is essential for civil society, academia, and media to work together to prevent money laundering and maintain the integrity of the financial sector.