UNDERSTANDING THE EU’S 4TH ANTI-MONEY LAUNDERING DIRECTIVE
RC: Could you provide a general overview of money laundering in Europe? Is there a perception that financial institutions, among others, are struggling to limit the perpetration of this crime?
Brain: The scale of money laundering in Europe each year is colossal. In the UK alone, a 2015 threat assessment compiled by the National Crime Agency (NCA) concluded that “hundreds of billions of US dollars of criminal money almost certainly continue to be laundered through UK banks, including their subsidiaries, each year”. Money laundering is often associated with some relatively exotic jurisdictions, however it is extremely attractive to criminals to launder money through the EU’s seemingly well-regulated countries, thus giving the money a legitimate appearance. Although Europe is bound by an overarching anti-money laundering directive, the implementation by member states has been inconsistent, and so has the appetite – and resources – of regulatory bodies to take action against those institutions falling foul of the requirements. Consequently, harmony across the EU in relation to the application of anti-money laundering regulation has not been achieved thus far. Efforts to rebuild financial institutions post-global financial crisis have not been matched with commensurate investment in compliance and compliance related technology. As a result, many financial institutions are struggling to meet anti-money laundering requirements.
Jul-Sep 2016 Issue