A vote in the European Parliament today improves EU law on money laundering to shine a light on places where laundering occurs, but also to cut some of the red tape that frustrates European businesses.
The vote on a series of reports – one authored by European Conservatives and Reformists Group MEP Timothy Kirkhope – will update law to take account of technological developments that make it much harder to link the cash to a crime such as trafficking, terrorism or corruption. The adoption by a joint meeting of two committees in the parliament signals support for a legislative agreement reached between the parliament and EU governments in the council.
The legislation agreed 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.
The legislation adopted today seeks to make information on beneficial ownership more readily available (those people who enjoy the benefits of ownership of an asset or company, even if they do not nominally own the asset). However, Mr Kirkhope was able to secure measures in the negotiations that tackle concerns about intrusion into trusts and wills by making them only accessible by law enforcement authorities.
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 after today’s vote, Mr Kirkhope, European Conservatives and Reformists group Justice and Home Affairs spokesman, said:
"This agreement strikes a good balance by shining a light into dark areas where launderers operate, without invading into very private matters or tying businesses up in red tape.
"Technology has moved on since the last money laundering directive and so the law has become burdensome to many businesses yet does not tackle modern money laundering practices.
"We have replaced the blanket approach with a more targeted and risk-based approach. We have lifted the burdens on most ordinary people who have to struggle with these rules when they carry out business or buy a car. But we will come down harder on those people who seek to hide money in shell companies.
"We wanted more transparency in people's trusts and wills but we also had to be aware that many people's arrangements also expose very personal information about their lives. Therefore, we have found a good agreement that will allow law enforcement authorities to see such information if they have reason to believe money is being laundered through trusts, but very sensitive information will not be made readily available.
"At a cost to the global economy of a trillion Pounds per year we need robust legislation to tackle money laundering. This law should make the battle easier whilst cutting red tape and protecting people's very sensitive personal information."