European Commission Reviewing Past Money-Laundering Cases, With Possible Anti-Money Laundering Rule Changes in Mind

On June 6, Reuters reported that, according to a European Union official, the European Commission (EC) “is reviewing past money-laundering cases at EU banks to assess what went wrong and decide possible tweaks to rules . . . .”  The review is reportedly “part of a broader plan to improve the European Union’s approach to combating money laundering,” after a number of banks in Cyprus, Denmark, Estonia, Latvia, Luxembourg, Malta, and the Netherlands experienced substantial problems with anti-money laundering (AML) compliance.

The EU official indicated to Reuters that the review includes three categories of financial institutions:

  1. Firms that met unexpected ends after reported money-laundering concerns, such as Maltese bank Pilatus, whose license the European Central Bank (EBC) revoked in 2018 after its chairman was arrested on money laundering charges in the United States, and Latvian bank ABLV, which the ECB deemed “failing or likely to fail” in 2018;
  2. Banks “that have been at the center of large scandals such as Danske Bank”; and
  3. Multinational banks Deutsche Bank and Societe Generale, for reasons the official did not explain.

As part of the plan, the EC reportedly “is assessing cases between 2012 and 2018 with the aim of producing a report this summer that identifies the factors that contributed to the banks’ failure in preventing financial crime.”  The official also stated that missions to EU states “are under way,” but did not clarify “whether reviews are conducted at the banks themselves or only with their national supervisors.”

Note: Chief compliance officers at financial institutions, both in the European Union and elsewhere, should watch for followup information on the EC’s review, including the expected report to be released this summer.  The fact that the EC is only now conducting such a comprehensive review of banks with AML failures indicates how far the EU has yet to go in developing and implementing an improved AML regime across Europe.

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