Home Europe EU Looks Into Creating Anti-Money Laundering System Following Bank Scandals

EU Looks Into Creating Anti-Money Laundering System Following Bank Scandals


The recent scandals involving various European banks have led the European Council to take strong action against money laundering and financial fraud. The finance ministers of the European Union in Brussels, in particular, took quick action to crack down the money laundering cases that occurred back in 2018. 

A week after the Deutsche Bank headquarters was raided, the council made this announcement. The raid was a part of a special money laundering investigation being conducted by the German police. The German Deutsche Bank, which is located in Frankfurt, underwent strict investigation for fraud activities.  

This action plan involved conducting a full scale evaluation on all the cases involving EU banks and determining the areas of security that need to be reviewed in order to prevent such incidents in the future. This was their short term move that they would implement in the following months allowing them to get a better understanding of what has to be done after the bank scandals. 

In lieu of this, the ministers promised that they would work very closely with the supervisors involved so that they can set new and more effective regulations. So far, the council is still in talks as to what actions will be done after the full scale review. The review is expected to last up to June of 2019 after the European elections that will take place sometime in May. This may imply that the newly elected Parliament will be the ones pushing the new reforms with legislative amendments. 

While this may seem like the most efficient way to handle the case, critics have mentioned that the adoption of such a plan may create delays in the plans of the European Commission. One of the reforms that would be affected is the reform proposed in September giving the European Banking Authority more control over the plans of the new anti-money laundering system. As a part of the system, there will be stricter regulations when it comes to serious breaches and money laundering wherein bank managers may stand to lose their banking licenses. 

Last December 12, 2018, the council already agreed to put more reinforced supervision in the banks. With this type of action, they expect that more discussions will be made in order to come out with more solutions as well. The plans are expected to be formally carried out starting sometime in 2020. While the plans are ongoing, the European Commission is invited to also make suggestions and proposals for amendments starting in the second half of the year. This would be after the full review finishes. 

So far, the countries that were affected by the money laundering activities last year included­­­­ Spain, Malta, Britain, Cyprus, Denmark, Estonia, Latvia, Luxembourg, and the Netherlands. The biggest money-laundering scam that happened during the last year was that of the Danske Bank wherein 200 billion EUR was laundered. Due to that, the ministers of Denmark and Estonia were called by the European Council in order to know how the activity happened.


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