The Court of Justice of the European Union today fined
Romania EUR 3 million & Ireland EUR 2 million
for failure to transpose in full the fourth money laundering directive and for failing to notify the European Commission of the transposition measures that they had undertook.
Here is what happened
Nine other EU27 Member States are still subject to infringement procedures
Austria, Belgium and the Netherlands are now to be referred to the CJEU for incomplete transposition of the directive
Six other Member States are at stage one or two of EU infringement procedures
What we think about it
Here at Lysis, we remain sceptical of the EU plans both for the European Banking Authority’s new role as an anti-money laundering (AML) ‘supervisor of supervisors’ and the further ambitious plan for a central pan-EU27 AML regulator.
Compliance with the existing AML regime at the Member State level appears largely optional and the fines imposed are ludicrously microscopic compared to each country’s GDP.
As the UK seeks ‘equivalence’ rulings on AML matters, the EU statements are increasingly absurd –
'Prime Minister Johnson agreed, in paragraph 82 of the Political Declaration that our agreement should cover anti-money laundering and counter terrorism financing. We are very far from this objective.’
Michel Barnier 5 June 2020
The fines imposed on Romania and Ireland were made for technical non-compliance (a rules-based box ticking exercise).
The EU fails to take risk-based action on AML issues despite the Danske Bank EUR 200 billion money laundering fiasco.
On 13 March 2020 Valdis Dombrovskis wrote to the UK Chancellor in astonishing and dismissive terms –
‘We are mapping the equivalence areas internally, and my teams will reach out to yours soon to collect evidence about the UK frameworks applying after the transition period, in line with our existing practice on equivalence assessments. I note that equivalence assessment will have to be forward-looking, taking into account of overall developments, including any divergences of UK rules from EU rules.’
The UK is and always has been wholly compliant with EU requirements (and international norms) with respect to AML.
The latest Status Report
In case you missed it
We published an article last week highlighting how Romania & Ireland were already in proceedings before the CJEU for incomplete transposition of the directive. Have a read for yourself here.
Written by
Tom Griffiths
Associate Director at Lysis Group
Notes:
EU infringement procedure
Formal notice
Reasoned opinion
Proceedings before the CJEU
Other infringement proceedings
There are still inflight proceedings against these Member States for failure to notify transposition of the fourth money laundering directive.
Implementation Timetable
by Article 67 of the fourth money laundering directive
26 June 2017 - Implementation of fourth money laundering directive
except
10 January 2020 - Corporate BO register [Art 30]
10 March 2020 - Trust BO register [Art 31]
10 July 2020 - Requirements for anonymous third country prepaid cards [Art 12(3)]
10 September - 2020 European Central Platform [Art 32a]
10 March 2021 - Member State interconnectivity of the centralised BO registers [Art 30-31]
References
Fourth money laundering directive consolidated text [EU 2015/849 amended by 2018/843]
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:02015L0849-20180709
UK Chancellor of the Exchequer to the European Commission 27 February 2020
European Commission to the UK Chancellor of the Exchequer 13 March 2020
Anti-money laundering directive IV (AMLD IV) - transposition status 2 June 2020
https://ec.europa.eu/info/publications/anti-money-laundering-directive-4-transposition-status_en
Michel Barnier speech 5 June 2020
https://ec.europa.eu/commission/presscorner/detail/en/speech_20_1017
EC press release 2 July 2020
https://ec.europa.eu/commission/presscorner/detail/en/IP_20_1228
EC July infringement package: key decisions 2 July 2020
https://ec.europa.eu/commission/presscorner/detail/en/inf_20_1212
Financial Times 3 July 2020
https://www.ft.com/content/0966d94c-f93d-4bfa-8c63-60173d281317
Court of Justice of the European Union PRESS RELEASE No 92/20 Luxembourg, 16 July 2020
https://curia.europa.eu/jcms/upload/docs/application/pdf/2020-07/cp200092en.pdf