Written by Colin Murphy.
Money laundering is how criminals convert the proceeds of crime into what appear to be legitimate earnings. Criminals are employing ever-more sophisticated methods, including digital and emerging crypto-currencies, to disguise the source of their money.
The impact on society of criminality is difficult to understate. It has a significantly negative effect across the socio economic spectrum. Likewise, money laundering – a vital cog in criminal enterprise – has the potential to impact on the stability of the financial infrastructure of states.
The EU and the wider international community recognises the importance of robust measures to tackle the issue of money laundering and have taken significant steps to address money laundering and also terrorist financing, which employs similar methods. The first EU anti-money laundering directive was adopted more than 30 years ago. Since then the EU has continued to develop its response to both anti-money laundering and terrorist financing threats. In addition to addressing inconsistencies in the application of rules across the EU, the level and nature of risks have changed with evolving technology and innovation.
The European Union has adopted an ambitious anti-money laundering package to protect EU citizens and to strengthen its financial system against organised crime and terrorists. This package will extensively harmonise procedures and close loopholes in anti-money laundering measures. The establishment of the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA) in Frankfurt, centralising oversight, brings a new dimension to the fight against money laundering. It will tackle newly emerging threats, and reinforce cross border cooperation and a more harmonised approach.
Read the complete briefing on ‘Understanding the EU’s response to money laundering: New EU anti-money laundering package‘ in the Think Tank pages of the European Parliament.
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