The EU is to explore the creation of a new central authority to crack down on money laundering activity, according to the Financial Times.
A series of high-profile scandals have underlined the weaknesses in preventing dirty cash from flowing through EU-based banks.
EU finance ministers are expected to formally mandate the European Commission to make recommendations on a new independent enforcement agency with “direct powers”, according to a draft statement to be endorsed when they meet in December 2019.
Several scandals have led to the decision:
(1) In 2018, the US law enforcement authorities uncovered institutionalised money laundering at Latvian ban ABLV.
(2) EUR 200 billion in suspicious transactions at Danske Bank’s Estonian branch.
(3) ING fined EUR 775 million for compliance failings.
(4) Deutsche Bank was ensnared in a scheme to illicitly shift criminal funds from Russia to the West.
The proposal for change is being led by France and the Netherlands after failings at the European Banking Authority which apparently rejected its own internal report that highlighted failings in the supervision of Danske Bank by Danish and Estonian regulators.
The gambling industry is regarded as very low risk when it comes to money laundering in the true sense of being partnered to organised crime. Will this new authority be given a mandate wider than the financial services and banking industry? GBGC suspects it will because security is only as strong as its weakest link and a clampdown on banks will force criminals to look at alternatives. As a result, the gambling industry may have to deal with yet another agency.