Union to step up fight against ‘dirty’ money

Date: 12/10/00

By John Shelley

EU MINISTERS will next week consider a host of proposals aimed at clamping down on international crime by preventing the movement of crooked money both within member states and across Union borders.

At a special joint meeting, justice and finance ministers will discuss plans to make member states tighten up their money-laundering laws, force banks to open up their records to outside scrutiny, and take firm action against countries which handle underworld cash. Tougher measures to combat money laundering are seen as crucial to prevent criminals taking advantage of the lack of border controls in the Union's single market.

The proposals under discussion include far-reaching plans to require banks to provide information about suspected money launderers' accounts to police officers from any EU country. The French presidency also will ask ministers to consider restricting or even outlawing financial transactions with certain countries, such as Russia, Panama and the Philippines, which allow themselves to become havens for illegally earned cash.

At the meeting next Tuesday (17 October), justice ministers hope to reach agreement on a proposal which would commit all member states to making the maximum penalty for money laundering at least four years and tightening up laws on confiscating the proceeds of crime. This is the only one of the many plans to be discussed at the meeting which is due to be agreed, but diplomats warn that it will be difficult to get a deal because Finland, Austria, the Netherlands and Portugal object to the plan as it stands.

Justice ministers will also begin considering a second, controversial set of proposals concerning banking secrecy. As well as forcing banks to cooperate with police from any EU country, financial institutions would be obliged to keep sufficient records to allow money to be traced which could perhaps later be used in evidence. "The feeling is that these plans are extremely radical," said one diplomat. "People are having to think hard about what changes in national law would be required for this."

Other possible measures to be discussed at the joint session of justice and finance ministers include how to deal with 'non-cooperative' countries or territories (NCCTs) which refuse to curb the flow of dirty money within their borders.

The French presidency will call for tough action, which could include requiring financial institutions to provide systematic accounts of their transactions with NCCT countries, banning NCCT citizens from opening accounts in the EU without a thorough identity check or, ultimately, imposing a blanket ban on transactions with these countries. But other governments are likely to favour a softer approach, arguing that the current talks between the black-listed countries, the Union and other world powers should be given more of a chance to make progress.

EU ministers will consider a host of proposals aimed at clamping down on international crime by preventing the movement of crooked money both within Member States and across Union borders, at a meeting on 17.10.00.