Money Laundering In EU Banks - In The Spotlight Of Special Tax Committee

; posted on
November 22nd, 2018

In light of the recent serious allegations of money laundering involving some EU financial institutions, particularly Danske Bank and ING Groep, the TAX3 Committee has decided to hold a hearing on money laundering in banks on 21 November 2018 with a view to improving the financial supervisory system.

Money Laundering Scandal in EU Banks

The European Commission has described the money-laundering case at Danske Bank and ING Groep as “the biggest scandal” in Europe. Related to Danske Bank, an independent investigation revealed that a series of major deficiencies in the bank´s governance and control systems made it possible to use Danske Bank’s branch in Estonia for suspicious transactions. The branch had a large number of non-resident customers in Estonia that carried out large volumes of transactions that should have never happened. Further, the report stated that €200bn money laundering sheltered in the bank, in which the €26.3bn of it is allegedly coming from illegal Russian money.

While the investigation for Danske still on going, ING on early September announced that it had agreed to pay a fine of EUR 675 million and EUR 100 million for disgorgement. As such the investigation started in 2016 due to the failure in implementing the Dutch Anti-Money Laundering and Counter-Terrorism Financing Act officially settled.

The Hearing

During the hearing, the special tax committee discussed the following issues to prevent another money laundering case in Europe:

  • the need to increase whistle-blower protection in Europe and to regard such persons as the most powerful tool to fighting fraud;
  • a reform of the role of regulators and supervisors, away from being considered as authorities to protect and help home businesses;
  • closer cooperation between the member states’ financial intelligence units and the possible establishment of an EU FIU;
  • the essential clamp-down on shell companies;
  • the need to link remuneration in banks less with performance and more with risk mitigation;

Follow-up

A delegation from the committee will travel to Denmark and Estonia to continue investigating the Danske bank scandal in early February.

Source: European Parliament

 

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