Latvia floats joint anti-money laundering action with EU partners

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Latvia has joined forces with five other European Union member states - France, Germany, Italy, Spain and the Netherlands - to propose a new approach to the prevention of money laundering (ML) and financing of terrorism (FT) by the EU.


AML paper final.pdf


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A paper pubished November 12 by the Latvian Finance Ministry gives details of the proposals, which it says are designed to close current loopholes in national laws and strengthen the EU's ability to act in a concerted manner.

"Organizing an ML/FT supervision function at a European level enables a consistent and effective approach to addressing the problems... Firstly, it enables a better exchange of information between supervisors, making it easier to exercise adequate supervision on cross-border institutions and activities. Secondly, investing in supervisory resources at the EU level will ML/FT help those member states to improve their knowledge and expertise, with resources being deployed where ML/FT risks are most significant. Thirdly, supervisory independence will be strengthened as a further layer of supervision will be placed at a greater distance from local institutions and interest groups. Lastly, a European ML/FT supervision layer with pooled human resources will help create a level playing field, as supervisory practices will be more uniform. This new supervision function should operate based on a set of harmonized, directly applicable rules," the proposal paper says.

"It should be guaranteed that national obligations with regards to, for instance, to customer due diligence and record keeping requirements are the same in every member state," it continues.

Further, it recommends "A European ML/FT supervisory mechanism, featuring a European central supervisor cooperating with national supervisory authorities," and says "Establishing a central supervisor that can supersede national supervisors and can independently conduct supervision is necessary to ensure consistent and effective European ML/FT supervision."

The full proposal is available to read online and is also attached to this news story.



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