EU financial crime: committee calls for financial police force

eu financial crime
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The European Parliament’s tax and financial crime committee has adopted new plans for an overhaul of the EU’s approach to financial crimes.

The Special Committee on Financial Crimes, Tax Evasion and Tax Avoidance, established in 2018 in response to a spate of revelations of financial wrongdoing across the EU, has adopted a range of recommendations to address financial crimes, with particular regard to money laundering, fraud and tax evasion. The report, issued yesterday, is the result of an intensive year-long multidisciplinary consultation, comprising 18 sector-specific hearings; 10 meetings with finance ministers and commissioners; and four fact-finding missions to Denmark and Estonia, the Isle of Man, Latvia and the USA.

Petr Ježek, the chair of the committee, said: “The considerable amount of work achieved by this committee over its twelve-month mandate has shed light on unprecedented issues affecting the banking and financial sectors. The investigations and hearings have helped us draft stronger recommendations, notably on the need to enforce EU AML/CFT [anti-money laundering/countering financing of terrorism] legislation better, stricter banking supervision, and enhanced information exchange among FIUs [Financial Intelligence Units, national bodies which work collaboratively to prevent and detect high level financial crimes] and tax authorities. It is now crucial to maintain pressure for the implementation of our recommendations to the governments and the relevant actors.”

The recommendations adopted by the committee include:

  • The establishment of a European financial police service;
  • The EU to implement an anti-money laundering watchdog;
  • A global tax oversight body to work out of the United Nations;
  • “Golden visa” schemes which offer passports or residence documents in exchange for large investments to be phased out;
  • Greater cooperation and coordination between Member States to address the exploitation of loopholes in tax systems and outright tax evasion;
  • Greater protection across the EU for whistleblowers and investigative journalists; and
  • Full investigations into the murders of journalists reporting on corruption and gang activity in Malta and Slovakia.

Co-rapporteur Jeppe Kofod said: “Europe has a serious money laundering and tax fraud problem. We have the world’s largest, richest and most integrated single market with free movement of capital, but little to no effective cross-border supervision and 28 differing national anti-money laundering and anti-tax fraud provisions. This creates a string of loopholes, which are far too easy for criminals to abuse to launder vast amounts of money as in the Danske Bank scandal, or design highly profitable tax theft schemes like CumEx [a high profile cross-Europe tax fraud scheme]. We need tougher EU-level regulation, harsh sanctions on banks facilitating financial crimes, and a new European financial police [division] within Europol.”

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