Commission to press for extension of EU-wide laws against money laundering

Date: 08/07/1999

By Renée Cordes
THE European Commission will later this month unveil long-awaited proposals to extend the scope of EU laws to combat money laundering to cover lawyers, real estate agents and casinos.

The institution is set to adopt a proposal by 21 July which is aimed at discouraging criminals from shifting their money-laundering activities from banking and financial services to other sectors.

Aides to Acting Internal Market Commissioner Mario Monti insist action is needed urgently given the especially large amount of cash in circulation during the change-over to the euro between now and 2002.

The Commission's proposal would extend the scope of a 1991 EU law under which financial institutions must ask all customers to provide proof of identification at the start of a business relationship or when a single transaction or a series of related transactions exceed 15,000 euro.

"I am pleased that the directive has been effective at countering money laundering and has proved to be a landmark in international efforts to combat this scourge," said Monti when he announced his intention to draft a new proposal. "But to guard against the single market being exploited by organised crime, we will be coming forward with proposals to extend and improve the current rule."

The existing directive only obliges member states to combat laundering of the proceeds of drug trafficking. However, nearly all governments have in the meantime extended their national legislation to cover profits from a wider range of crimes. These include terrorism, trafficking armaments, antiques or human organs, illegal gaming, blackmail and armed robbery.

Monti's latest proposal will also call for improved cooperation between financial authorities in the member states to investigate allegations of money laundering.

Currently, 'financial intelligence units' in Austria, Denmark, Germany, Luxembourg, Ireland and Finland are forbidden by law from exchanging information with some of their counterparts in other member states.

Monti argues that improved coordination among watchdogs could "contribute to increasing the relatively limited number of prosecutions, convictions and asset-seizures based on suspicious transaction reports".