Weak control, institutional fragmentation, insufficient coordination: even if the fight to stem the phenomenon of money laundering is announced as a priority by its member states, the European Union does not manage to carry it out with sufficient efficiency. Money laundering still allows criminals to take advantage of the free movement of capital and to distort the rules of the internal market. Or even finance terrorist activities.
Published Monday, June 28, a report from the European Court of Auditors, the institution based in Luxembourg which oversees the sound financial management of the EU, details a list of shortcomings that would lose a lot of money every year to the ‘Europe. Europol estimates the shortfall at several hundred billion euros. Globally, the amount of money laundering is estimated to be around 3% of world GDP, or 2,129 billion.
Complex scaffolding
As early as 1991, the EU tried to equip itself with instruments to stem the phenomenon. Its guidelines have since been updated four times, and a complex scaffolding has been put in place. However, these initiatives have not solved a fundamental problem: their implementation depends on the member countries, and it is at this level that many gaps are identified. This does not mean that the Community institutions do not also reproduce a pattern that is all too well known: the good initial intentions are not always translated into action, and they come up against a lot of bureaucratic constraints.
In the current organization, four institutions intervene to counter money laundering. First, the Brussels Commission, which sets the policy to be followed and must monitor the transposition of these directives. The European Banking Authority, whose mandate was strengthened last year. The European Central Bank, which acts as part of its banking sector supervision mission and must share information with national supervisory bodies. Without forgetting Europol, which is supposed to provide data to other stakeholders, or the European External Action Service (EEAS), which is supposed to provide information on the situation in “third countries” (outside the EU), and thus contribute to the assessment of the risks represented by these latter.
This confusion could undoubtedly be resolved by the establishment of a single supervisory authority, modeled on the American model of the Financial Crime Enforcement Network.
In this regard, the Commission must publish a report every two years. Problem, note the Court’s auditors: the EEAS does not cooperate sufficiently, while the Commission does not manage to correctly prioritize the risks incurred, nor does it identify any changes that may have occurred between two of its reports.
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