Money Laundering: Sunshine Is Best Disinfectant

I'm delighted that a report I drafted was adopted today, with 627 Members voting in favour, 33 voting against and 18 abstaining.

The Regulation on fund transfers is one of two proposals that make up the 4th Anti-Money Laundering Package.


I made remarks to the House this morning welcoming the 4th Anti-Money Laundering Package ahead of the plenary vote this lunchtime.

I was responsible for drafting the Regulation on transfers of funds, which sets out rules on the information that accompanies payments. I was also involved as a Shadow Rapporteur on the 4th Anti-Money Laundering Directive, which sets out overarching rules for Member States.

I understand that this has caused a good deal of debate in the UK about the treatment of trusts. I deal with this in my speech - I believe we have done well to get a good, workable compromise which will help us during the inter-institutional negotiations that will take place in the coming weeks and months.

Here is my speech: 

President, Commissioner,

What we’re discussing here today is an essential crime-fighting measure.

Money Laundering may seem like a less dangerous form of crime in some people's minds, but in reality it goes right to the heart of criminality in Europe. These offences funds some of society's worst crimes such as terrorism and drug smuggling, and indeed people smuggling as well.

The fight against money laundering is not an easy one. It requires often lengthy and laborious processes in following trails. It involves dedicated individuals sifting through reams of information looking for anomalies. But it’s worth it: at the end of the process they end up catching real criminals: the leaders of the crime gangs who are responsible for the vast majority of the organised crime in Europe.

Our most central aim is to make it easier for our law enforcement bodies to prevent abuse to our financial systems, and to prosecute criminals. We must make it harder for illegitimate money to be hidden in Europe’s legal economy.

Money laundering does not restrict itself to the borders of individual countries. Money changes hands and changes legal jurisdictions constantly. The very nature of organised crime and of money laundering requires us all to be prepared to put in place nothing short of the most robust rules.

I have always believed that in any fight against fraud and money laundering: sunshine is the best disinfectant. My hopes for this package of legislation, is that it will shine a very bright light on the dark and murky depths of organised crime across Europe.

I am Rapporteur on the Fund Transfer Regulation and Shadow Rapporteur on the Anti-Money Laundering Directive. Both go hand-in-hand and set out to update the current AML rules by changing the way we use information to spot fraudsters. We're all aware of the problems created from the last money laundering Directive, but I believe this is our opportunity to learn from those mistakes.

This package is about making life easier for those that are innocent and harder for those that commit crimes.

I welcome the main changes that mean that when the new rules are implemented we adopt a risk-based approach, we extend the scope to cover gambling and we open up company ownership to the public.

These are fundamental changes and there will be profound consequences, but I believe they will be viewed positively by citizens and businesses, and negatively by criminals. And I hope these new rules will help us to tackle not just money laundering but tax evasion and eventually breed even greater confidence in our economy.

There have been some big talking points. On my report (on the Regulation), my co-Rapporteur and I saw a number of Amendments tabled which would strip away the simplified payments regime that exists within Europe. But we were both of the opinion that this was unnecessary, and would disproportionately disadvantage many payment providers, and their customers, whilst providing little 'AML' value.

On the Directive itself, we found that the main areas of debate were how to deal with beneficial ownership, gambling and politically exposed persons. We worked hard to find good compromises.

But let me touch on trusts. It is well known that the UK has a special situation regarding trusts; they provide the legal basis for a number of transactions and institutions such as property ownership, estate planning, wills and insurance. It is thought that the mandatory registration of trusts would not only compromise the privacy of individuals but also add red tape and costs to families’ financial planning. The fact that they fall under the UK’s common law system also adds further complications. And as a lawyer, I was aware of the difficulties this might pose, and I have worked hard to find language that limits the risk of public exposure for vulnerable people and in cases where the trusts themselves pose little or no risk of money laundering, such as in relation to wills etc. I’m happy to say this was taken on board, but I have tabled a further Amendment today.

It is a debate which we repeatedly have in this house, that the fight against crime must not be pursued at the cost of a person's right to privacy and an absence of proportionality.

Finally, Mr President, this is about making sure our payment institutions and law enforcement bodies are better able to spot anomalies that occur in financial data and stopping serious criminal activity.

Colleagues have worked hard on this proposal and I support it.