The European Parliament wants an EU anti-money-laundering authority that polices national supervisors, enforces sanctions and with the power to fine companies millions of euros for flouting safeguards.
MEPs on Tuesday voted through their vision of the future dirty money watchdog, which is supposed to help weed out suspect activity across the bloc worth some €160 billion.
“Dirty money is not just a threat to our democracy, it also fuels inequality and injustice,” said Spanish liberal MEP Eva-Maria Poptcheva, who helped shepherd the AMLA bill through Parliament. “Ordinary citizens struggle to make ends meet and all the while criminals prosper with the complicity of such systemic corruption. This has to end.”
The race is now on to agree on a final legal text with EU governments in the Council for the new supervisor, called AMLA, before the Parliament dissolves next year. Legislative negotiations are slated to begin this spring.
Failing that, the bloc would have to wait even longer for a supervisor that’s supposed to shine a light on a blind spot in banking supervision that allowed for a series of sectoral scandals in 2018.
The biggest of these involved €200 billion of suspicious funds flowing through the Estonia branch of Danske Bank, Denmark’s largest lender, forcing policymakers to face a problem head-on.
Legislative talks on contentious bills often drag out. Controversy is already brewing over the Parliament’s role in choosing the home city for AMLA and the longer talks take, the longer the EU is deprived of a supervisor it needs.
Sanction enforcer
Other than supervision, MEPs hope that AMLA will become the EU equivalent of the U.S. Office of Foreign Assets Control to help coordinate and enforce financial sanctions.
The EU has already agreed 10 sanction packages against Russia over its invasion of Ukraine. The next step is proving the measures carry teeth and crack down on sanction dodging, a challenge that is shared among many foreign ministries in Europe.
It’s “urgent that the EU and its partners counter sanctions circumvention together,” Belgium, the Czech Republic, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Romania, Spain and the Netherlands wrote in a position paper.
Part of the solution should be to “leverage the soon-to-be established EU Anti-Money Laundering Authority” with 500 full-time employees, “for countering sanctions circumvention,” according to the three-page document, obtained by POLITICO.
Location politics
Few differences lie between the Council and the Parliament on what powers AMLA should have. The main disagreement lurks in the decision-making process behind picking the watchdog’s future home, with Austria, Belgium, France, Germany, Italy, Latvia, Lithuania, Luxembourg and Spain all vying for the prestigious body.
Governments in the past relied on contentious voting systems behind closed doors to decide where EU agencies should end up. That changed last summer after the EU courts decided Parliament had a defining role to play in the selection process and MEPs are clutching that new-found right.
MEPs want to develop a joint list of criteria with the Council and launch the application process together. Each house should then draw up a shortlist of cities and thrash out the winner in one of the final legislative negotiations. Few countries love this idea, including the man behind Paris’ bid for AMLA, Robert Ophèle, who used to head the French financial watchdog.
“I think it’s an institutional nightmare,” he said, while acknowledging the court’s decision. The fear is that looming legislative negotiations will descend into gridlock and remain stuck past next year’s parliamentary elections. “We need the AMLA to go live rapidly and it would be a shame for the EU to have agreed on the substance but being just then frozen by the location issue.”
