On Thursday, finance ministers at the European Union agreed to back plans for stronger supervision to curb money-laundering. The decision follows a series of revelations about large amounts of dirty money flowing through European Banks.
Last year, the Eu experienced its most massive money-laundering scandal when it emerged at 200 billion euros ($220 billion) is suspicious payments made between 2007-2015 through the Danske Bank’s tiny Estonian branch.
Since then, several other cases have emerged, the latest involving Malta’s largest lender, Bank of Valletta. The European Central Bank said Bank of Valletta had failed to address dirty-money risks for years.
In a joint statement, EU ministers called on the EC to explore the possibility of transferring supervisory power to an EU body. Also, to amend rules to reinforce coordination among national authorities.
Despite criminal organizations frequently laundering dirty money from abroad, currently the national authorities still handle the fight against financial crime in the EU. But the authorities do not always cooperate.
Ministers said an EU body “with an independent structure, and direct powers” over banks should be considered, reversing opposition to such a move last year.
They also emphasized a fresh overhaul of EU rules to fight dirty money- only a year after the bloc adopted the 5th revision of its anti-money-laundering rules.
Last year, conflicting interests watered-down reforms among EU states and quickly appeared insufficient as new scandals emerged.
Before the meeting, some of the EU’s largest states, including Germany, France, and Italy, said powers should be transferred to an EU authority. They argued that national watchdogs had proved incapable of tackling financial crime.
They went as far as saying there was a risk of some national supervisors “being influenced directly or indirectly by supervised institutions or interest groups.”
Smaller states, such as Luxembourg, Malta, Cyprus, and the Baltic countries, have been accused of lax controls, which have allowed repeated cases of money laundering.
Most ministers supported the joint statement at a public session of their meeting on Thursday.
But some, such as Luxembourg, did not join the discussion, leaving it unclear whether they would back the reform.
Malta’s finance minister, Edward Scicluna, said he fully backed the overhaul.
He faces a criminal probe over money laundering in which he denies wrongdoing.
The Maltese government has also confirmed support for state-owned Bank of Valletta after its dirty-money shortfalls emerged last month.