A new era begins (EU AML supervision)

During the last couple of months the EU has been analysing a number of possibilities to address the current crisis regarding tax crimes and AML.
In that fight, a number of regulations and directives have been produced to foster cooperation and harmonisation within the EU.

The report highlighted a number of issues regarding tax matters, and found that some initial solutions and regulatory items are in place to effectively address the matter, given the current rules of cooperation and transparency.

As a second issue, AML has been in the centre of EU concern following the numerous banks linked to money laundering (ML) and the ineffective fight against financing of terrorism (TF), corruption (CB) and proliferation of massive destruction weapons (PW).

It was noted that the legal tool of directives is showing to be inefficient for the treatment of ML/TF/BC/PW, therefore, the institution of more harmonised political and legislative tools is envisaged (E.g. Regulations).
The decision named pivotal to develop supervisory powers of existing agencies and the creation of new agencies at EU level or even at global level (E.g. case of the Global tax transparency initiative at United Nations level).

The report concluded that local supervisors may see their independency compromised given their interaction with local practitioners and the importance that an entity or a sector may have in the local economy and in the country strategy, having as result un-harmonised application of professional obligations.

A new AML EU supervisor was proposed, and was noted the need to deliver this newly created agency with powers, budget and human capital as well as with the possibility of taking action over supervisors and private participants including revocation of licenses (letting EBA taking care of the banking sector as from the present).
The application of those rules will be direct to all Obliged Entities as described in the 5AMLD.

As part of the enforcement elements analysed, was noted and implemented that sanctions should include Senior Officers and decision makers, key officials as well as dissuasive measures to prevent and stop any breach of the AML rules and regulations.

Furthermore, simplified procedures are to be set to facilitate the freeze of assets, the sharing of information and the investigations upon cross boarding violations.

At international level, was noted that the implementation of a black list in Europe is necessary and that the methodology utilised for the first production is sound and effective.

Preoccupation was highlighted in regards to the implementation of a sound AML regime and the effectiveness of such regime in Switzerland.
A note was made in regards to the need of intermediaries to enforce actions of compliance and supervisors to effectively inforce AML and Tax rules in any intermediary.

As a closing note to this summary, was stated that 85% of global investment passes through the Netherlands, Luxembourg, Hong Kong, The British Virgin Islands, Bermuda, the Cayman Islands, Ireland and Singapore so this jurisdictions should be subject to special scrutiny and understanding (Note escalated to United Nations and the Financial Action Task Force FATF) fact that  may impact the extent and deepness of the FATF review and the several previous that Luxembourg will face in the period 2019-2021.



Jaime Prieto

Mr. Jaime Prieto is a lawyer experienced in Financial Crime, Anti-Money Laundering and Counter Terrorism Financing having extensive professional experience in both public and private sectors. Mr. Prieto has been a Head of Compliance in the European Union, the Americas and the Caribbean for banks, trust companies, asset managers, Big Four audit and advisory firms, RegTechs, government agencies and other types of financial professionals. In addition to his experience, he has been legal and educational chair in several compliance and sectorial organisations and performed as a teacher and speaker for a number of organisations and in several local and international forums. Furthermore, Mr. Prieto is an experienced Money Laundering Reporting Officer anda Data Protection officer with additional experience in risk management.

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