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Spotlight on Europe’s dirty money

20 May 2015

Spotlight on Europe’s dirty money

New anti-money-laundering legislation voted through the European Parliament today aims to shine a light on areas where criminals launder dirty money, but cut the red tape and inflexibility of current laws in place, Timothy Kirkhope MEP, one of the parliament’s lead members on the new law, said this afternoon.

New anti-money-laundering legislation voted through the European Parliament today aims to shine a light on areas where criminals launder dirty money, but cut the red tape and inflexibility of current laws in place, Timothy Kirkhope MEP, one of the parliament’s lead members on the new law, said this afternoon.

The directive aims to bring law up to date with technological developments that make it much harder to link the cash to crimes such as trafficking, terrorism or corruption. It will work on the basis of assessing risks, so that the majority of people who transfer money or set up businesses are hardly affected by it. However, it will also shine a light on those using fake companies to deposit money, or disguising assets; and it will require more information to accompany the transfer of funds, in line with new international standards.

In October 2013, UK Prime Minister David Cameron committed to making public a new central register of company beneficial ownership (those people who enjoy the benefits of ownership of an asset or company, even if they do not nominally own the asset). He said: “we need to shine a spotlight on who owns what and where money is really flowing.” The legislation adopted today seeks to make information on beneficial ownership more readily available. However, Mr Kirkhope was able to secure an important provision within the final agreement that tackles concerns about intrusion into trusts and wills. The directive now specifically prevents sensitive information from being disclosed, unless there is a serious risk of the trust being abused for money laundering purposes.

Mr Kirkhope, drafted the parliament’s position on strengthening rules regarding information that accompanies all bank and wire transfers, to fill the gaps and loopholes that can be used by criminals and terrorists to launder funds. Future transfers would require some basic information on the payee to be transmitted alongside the transfer, and providers would be required to establish risk-based procedures to determine when necessary to execute or reject a transfer, or to demand more information if foul play is suspected.

Speaking in the plenary debate this week, Mr Kirkhope, European Conservatives and Reformists group justice and home affairs spokesman, said:

“If you cut off the flow of money, you can cut off the long reach of criminal groups and terrorists, and help better protect the stability of our economy and the individual. The power and damage money laundering can cause should never be underestimated. Where criminal activity in our economic markets is concerned; transparency is a powerful weapon.

“Criminals must be left nowhere to hide, therefore we need to look beyond the corners of the EU, and cooperate with the rest of the world. The ability to follow money across borders and seize back assets must shrink, and so must the space in which criminals are able to operate. I believe that this package will help in that endeavour.

“The main aim of these reports was to right the wrongs of the past. For years both consumers and business ran into difficulties with implementing previous legislation. Our aim this time round has been to create a sensible, proportionate and effective way forward in the fight against money laundering. This report aims to minimise bureaucracy for business and inconvenience for consumers, as well as provide a tough new regime in the fight against illicit money.

“Protecting privacy of individuals was also a key priority. Some of the most private and personal information there is about a person is contained in wills and trusts, therefore, it was important that we secured agreement that only the appropriate authorities would be able to view and use this information. By making sure this provision was in place, we made sure that there were no legal loopholes for criminals and that we protected people’s privacy.

“The fight against money laundering has today gained a new weapon in its arsenal. With new payment methods emerging every day and with increasingly sophisticated technology we face a tough challenge, butI believe that sunshine is the best disinfectant. I believe that this legislation shines a bright light in the direction of criminality.”

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