Transcript Money Laundering and Terrorist Financing – Challenges from a European Perspective Public hearing on tax and financial havens 21 March 2012

Money Laundering and
Terrorist Financing –
Challenges from a European
Perspective
Public hearing on tax and
financial havens
21 March 2012
Structure
• What is Money Laundering and
Terrorist Financing?
• Policy response
• What next?
Money Laundering/Terrorist
Financing
• ML: The conversion of the proceeds of
illicit activity into apparently “clean”
assets.
• TF: The financing of:
- terrorist acts
- terrorists
- terrorist organisations
How Does Money Laundering
Work? – The Theory
Placement
Layering
Integration
The Policy Response
• FATF
• UE
FATF
• Policy-making body
• FATF standards
• Mutual evaluations
EU
Directive 2005/60/EC
Main features:
• Prohibits money laundering and terrorist financing
• Imposes customer due diligence and reporting obligations to
financial and some non financial businesses and professions
• Obliges Member States to establish a Financial Intelligence Unit
• Protection of employees against threats or hostile actions
• No tipping-off
• Record keeping (5 years after end of relationship for CDD)
• CDD and record keeping to be applied to branches and subsidiaries
outside the EU
• Compulsory supervision
Directive 2005/60/EC
The directive has been transposed in all EEA
countries
 It is only one element in a broader legal framework
which also comprises:
- Regulation 1781/2006 on payer information
accompanying transfers of funds
- EU legal instruments on freezing of assets
- Council Decision 2000/642 on FIUs cooperation etc.
- Commission Directive of 1 August 2006
Revision of the Directive
2005/60/EC
• Evolution, not revolution
• AMLD regimes basically work – but modifications
necessary in light of new technologies, market
changes and new threats.
• EU legislation must be adapted to new
international standards
• Proposal of Directive: October 2012
Conclusion
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•
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What next?
Towards the Fourth AMLD
FATF 4th Round
Developing effectiveness assessment
Reacting to new threats
Tentative timing for revision of
framework
2012
2013
15 February
Adoption of new FATF standards
April
Adoption of Commission Report
June
Close public consultation
End
October
2012
Adoption of an EU proposal to revise the
3rd AMLD
23
November
Possible public hearing to present main lines
of planned changes
2nd semester Finalise negotiations (co-decision procedure)
Final quarter Start of FATF evaluation process
Thank you for your attention