Am 8. November fand erneut eine Sitzung des Panama-Papers-Untersuchungsausschusses statt. Dabei wurde der Stand der Umsetzung der Anti-Geldwäsche-Gesetzgebung der EU mit der zuständigen Kommissarin Věra Jourová erörtert.
Hier die Fragen der Auschussmitglieder und die Antworten der Kommissarin:
1. Can you provide an overview of the enforcement actions the Commission has taken so far against Member States in the area of implementation of AML legislation?
The Commission has taken several steps to ensure the correct implementation of the anti-money laundering legislation by Member States. The process for ensuring this is multi-layered and starts with transposition checks, conformity studies, complaints, as well as mutual evaluations carried out by international bodies like the FATF and Moneyval.
The Commission has already provided several documents in this respect and my services are currently preparing an overview of enforcement actions relating to non-communication of national transposition measures and alleged non-compliance with Directive 2005/60/EC (The third Anti-Money laundering Directive), the Implementing Directive 2006/70/EC on PEPs and exemptions on grounds of a financial activity conducted on an occasional or very limited basis and the Funds Transfer Regulation (EC) No 1781/2006.
2. We understand that the enforcement action of the Commission is mainly to assess whether Member States have passed legislation to implement EU AML legislation, and whether they have communicated this to the Commission. This assessment seems to be rather on a ‘formal’ basis, instead of assessing the correct transposition in substance of AML legislation.
The Commission’s enforcement work starts with the transposition checks, i.e. checking whether the Member States have passed legislation to implement the EU anti-money laundering legislation. However, the work does not stop at this point. The Commission also examines the substance of the Member States’ laws based on studies that are specifically commissioned for this purpose. In the context of the 3AMLD, the Commission asked a contractor to produce conformity assessments reports of the relevant Directives and based its own assessment on these reports
Complaints by citizens and companies are also thoroughly examined.
The Commission is committed to ensure both a timely and correct transposition by the Member States.
Does the Commission consider allocating more resources on the assessment of possible infringements of EU law in this area? And more generally, does the Commission intend to allocate appropriate/ adequate resources to AML legislation and enforcement in the future, as this seemingly is not the case currently?
In the current context of staff reduction in the Commission, the European Commission has to ensure that resources are allocated according to priorities. Reflecting the priority attached to internal security including the fight against money laundering and terrorist financing, the Directorate General for Justice and Consumers now has a dedicated Unit to deal with Financial Crime. The team is responsible for following negotiations on the amendments to the 4th AML Directive legal framework but also making sure that existing EU laws are correctly transposed and implemented in national law. Its tasks also include to analyse the risks of money laundering and terrorist financing at EU level (risks affecting the internal market and relating to cross-border activities) and to contribute the development of standards at international level.
As of 1 October 2016, this Unit has been reinforced with additional human resources.
As a guardian of the Treaty, the Commission will diligently fulfil its role of taking up infringement cases whenever we detect problems in implementation. At the same time, Member States and their respective national authorities have to assume their responsibilities.
4. We understand the Commission relies on the ‘peer review’ approach via FATF and Moneyval, and on some smaller external studies on a punctual basis
Given the alleged cases of money-laundering revealed by the Panama Papers, which we consider to be a failure to implement and enforce AML legislation in the EU, is the Commission reassessing its practice to only rely on external assessments?
The Commission is currently considering how to best assess the conformity of the national legislation that will transpose the 4th AML Directive, as well as the amendments to it which are currently being negotiated. Normally, the Commission uses a whole range of tools to do that. We rely on desk review but we also work closely with Member States and guide them with specific workshops and bilateral contacts throughout the process of transposing EU law. We also request external assessments. The contractors for performing external studies are selected based on objective criteria and on their expertise. The Commission often corroborates the information thus obtained through multiple sources, including mutual evaluation reports from FATF and Moneyval. Complaints brought forward by citizens and companies are also essential to check the effective transposition and application of EU law.
We work closely with Member States and give them the opportunity to explain and redress identified gaps.
Furthermore, does the Commission agree that this revelations put into question the whole ‘peer review’ process by FATF and Moneyval, notably if the FATF declares Panama as ‘fully compliant’ in March 2016, just 2 weeks before the Panama Papers revelations become public?
The „Panama papers“ cover a period where Panama was indeed identified by the FATF as high-risk country having strategic deficiencies in its anti-money laundering regime in the past (1970 – 2015). New legislation on anti-money laundering and counter terrorist financing has been passed in Panama. The Commission notes that Panama until February 2016 was subject to the FATF’s monitoring process for high-risk and non-cooperative jurisdictions on AML/CFT grounds.
Under the new Anti-Money Laundering Directive, the Commission has to identify high-risk third countries on grounds of deficiencies in their anti-money laundering legislation, based on specific criteria. Currently, Panama and the Bahamas (as well as US/Delaware and British Virgin Islands) do not have strategic deficiencies in their anti-money laundering / terrorism financing legislation that justify to be listed by the Financial Action Task Force (FATF).
This does not mean that those countries do not have strategic weaknesses in other areas – for instance for tax cooperation or transparency of beneficial ownership information. So this situation is without prejudice to the EU’s assessment of third countries with regard to tax cooperation, especially the establishment of the common EU list of non-cooperative tax jurisdictions – which is a separate ongoing exercise based on different criteria.
4. Linked to the previous question, the FATF ‘black’ and ‘grey’ lists of jurisdictions with strategic deficiencies in the implementation of AML do not seem to accurately reflect the true risk of money-laundering in these countries, as the Panama Papers illustrate
Will the Commission now conduct its own assessments for the adoption of the EU ‘black lists’, as the ECON and LIBE committees already demanded?
The Commission is pursuing an ambitious agenda in order to protect the internal market from money laundering and terrorist financing threats emanating from high risk third countries. In its proposal of July 2016 to revise the 4th AMLD, the Commission aims at strengthening the framework concerning the third countries policy by imposing a systematic and harmonised enhanced monitoring of transactions involving high risk third countries included in the list. In that respect, the Commission is going far beyond what FATF requires to apply towards high risk jurisdictions.
As recognised in 4AMLD, the relevant Union legal acts should, where appropriate, be aligned with FATF standards with a view to reinforcing the efficacy of the fight against money laundering and terrorist financing at a global level.
According to the 4AMLD, the Commission shall take into account, as appropriate, relevant evaluations, assessments or reports drawn up by international organisations and standard setters with competence in the field of preventing money laundering and terrorist financing, i.e. it should consider for instance FATF Public Statements, mutual evaluations, and detailed assessment reports issued by those organisations. With regard to the assessment carried out by the FATF, the Commission actively takes part in such assessments as a FATF member. In particular, the Commission is actively participating in the work carried out by the International Cooperation Review Group of FATF which reviews countries having strategic deficiencies. It must be stressed that the FATF evaluations follow a thorough and rigorous evaluation process – based on technical criteria (the reports usually run to hundreds of pages). This evaluation process is also based on on-site visits in order to check how rules are effectively applied on the grounds. This process allows producing very robust sources of information – which is also recognised by our international partners.
The purpose is to further promote and support international efforts against high-risk jurisdictions from an AML/CFT perspective. By promoting a global approach at international level, the EU contributes to enhancing the financial integrity worldwide and better protecting the international financial system high-risk operations. Such a global approach serves to achieve equivalent conditions for obliged entities and avoid any disruptive effect on the international financial system.
At the same time, the Commission assessment is an autonomous process based on specific criteria set out in Article 9(2), while taking into account evaluations made by FATF and other international organisations. Therefore, the Commission remains free to differ from FATF list for example by including on its list third countries that are not listed by FATF. The current assessment is made without prejudice to the Commission’s power to continue to identify, on an ongoing basis, additional jurisdictions that pose a risk to the international financial system on grounds linked to money laundering and/or terrorist financing.
In this context it should be noted that Article 9 does not allow the Commission to identify non-cooperative tax jurisdictions when those countries do not at the same time show strategic deficiencies in their legislation combatting money laundering and terrorist financing. Different frameworks exist to deal with the specific issue of tax evasion and the Commission is working on establishing a common EU list of non-cooperative tax jurisdictions – which is a separate exercise.
5. There seem to have been no involvement of US citizens in the Panama Papers. Does the Commission consider that US citizens do in general not participate in any ML activities, or do the Panama Papers rather reveal that there is no need for US citizens to pass via a 3rd country jurisdiction to conceal a beneficial owner, since several US states offer similar possibilities ‘on shore’, within the US?
If the latter is the case, does the Commission intend to raise the question of the lack of beneficial ownership transparency in certain US states within the appropriate bodies in FATF?
The Commission is not in a position to confirm whether US citizens are involved in the Panama Papers. There are however press reports which indicate both that there are US citizens involved and that a criminal investigation by US authorities in relation to the leaks is ongoing.
The Financial Action Task Force has assessed in 2006[1] the US legal framework as being non-compliant with international standards on transparency of beneficial ownership. In the context of the new evaluation round, the FATF has adopted on 21 October 2016 the US mutual evaluation report which provides for an updated assessment with regard to the remaining deficiencies on transparency on beneficial ownership.
In addition, the Commission is conducting a political dialogue at senior level with the US – where regulatory developments on AML/CFT are specifically discussed.
The Commission fully supports the call of G20 to ensure rapid and effective implementation of international standards on transparency of beneficial ownership information for legal entities and legal arrangements.
6. With regard to the recent proposal by the Commission to revise the 4th Anti-Money-Laundering Directive (4AMLD), which consists of a group of ‘counter-terrorism’ measures, and a group of ‘beneficial ownership transparency’ measures: We understand that in Council Member States can rather easily agree to the ‘counter-terrorism’ measures, but some seem to have difficulties with the ‘beneficial ownership transparency’ measures.
Can the COM give the current state-of-play of the negotiations in Council?
Does the COM agree that both aspects will need to be equally addressed, and will be COM stand by the Parliament in negotiations with the Council to also defend these measures to increase beneficial ownership transparency?
The Commission believes these three related questions under point 6 are best answered together.
The ongoing negotiations in the Council cover the Commission proposal in its entirety and progress has been achieved on both the counter-terrorism measures and the beneficial ownership transparency measures.
With particular regard to the measures included in the Commission proposal that deal with public access to information about the beneficial owners, the Commission remains convinced that transparency is at the heart of any strategy to prevent money laundering, terrorist financing and tax evasion. Already, the 4th Anti-Money Laundering Directive requires that corporate and other legal entities incorporated in the EU obtain and hold adequate, accurate and current information on their beneficial ownership. Public access to such information allows greater scrutiny of information by civil society and contributes to preserving trust in the integrity of business transactions and of the financial system.
The Commission stands firmly behind its proposal to amend the 4th Anti-Money Laundering Directive and the First Company Law Directive, in order to provide public access to well-defined elements of beneficial ownership information.
The Commission expects good progress in the negotiations in the next few weeks, hopefully leading to the adoption of a general approach by the ECOFIN Council on 6 December.
7. Are there new elements that were revealed by the Bahamas leaks that the EP should take into account when discussing the review of the 5th AMLD?
The Commission has closely followed the new revelations published by the International Consortium of Investigative Journalists, the German newspaper Süddeutsche Zeitung and media outlets worldwide about offshore companies in the Bahamas.
The proposed amendments to the 4th Anti-Money Laundering Directive address and should tackle the issues raised by the Bahamas leaks. A timely adoption and transposition of the revised directive would be therefore beneficial.
8. Does the Commission fully commit itself to fully cooperate with the EP and the PANA committee with regard to the access to other confidential documents, in line with the inter-institutional agreement?
The Commission is committed to full transparency and cooperation in order to facilitate the important work of the European Parliament. A draft arrangement for the handling of confidential documents in the possession of the Commission has already been sent to the PANA committee. The Commission looks forward to reaching an early agreement on this issue.
9. Does the Commission commit itself to put forward a proposal on the protection of whistleblowers in the EU?
The Commission fully supports the objective of protecting whistle-blowers against retaliation and has taken steps to protect whistle-blowers in EU sectorial legislation. In addition, it is facilitating research and exchange of best practice to encourage improved protection at national level.
In parallel, as announced in its Communication of 5 July, in the Letter of Intent complementing President Juncker’s 2016 State of the Union address, and in the Commission Work Programme for 2017, the Commission is currently assessing the scope for further action to strengthen the protection of whistle-blowers in EU law, through horizontal or further sectorial rules, while respecting the principle of subsidiarity.
[1] http://www.fatf-gafi.org/media/fatf/documents/reports/mer/MER%20US%20full.pdf