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Aki Corsoni-Husain
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Andrew Knight
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Joshua Mangeot
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Mirza Manraj
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Elina Mantrali
Mirza Manraj
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Vanessa Molloy
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Andrea Moundi Savvides
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Marina Stavrou
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Matt Taber
Matt Taber
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Carolynn Vivian
Carolynn Vivian
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The Council of the EU calls for improvements on financial investigations

On 17 June 2020, the Council of the European Union produced conclusions on enhancing financial investigations to fight serious and organised crime.

The present legal framework includes the Directive 2015/849 for the prevention of the use of the financial system for the purpose of money laundering (5AMLD), the Directive on money laundering by criminal law (2018/1673) and the Directive on the use of financial information (2019/1153) (Financial Information Directive). Despite these measures, the proceeds of organised crime in the European Union are estimated to amount to €110 billion annually and the rate of confiscation is just over 1 per cent.

Under 5AMLD Member States are required by 10 September 2020 to put in place national centralised bank account registries, and the Financial Information Directive requires Member States to provide direct access to national bank account registries to Asset Recovery Offices (AROs), other national authorities, and Financial Intelligence Units (FIUs).

The Council espoused the “follow the money approach” for tackling organised crime and for the identification of leads and for asset recovery. It recognised the use of virtual assets (or crypto-assets) and fiat currencies. The approach intended is coordinated private/ public, national/ EU and inter-state.

The conclusions seek to facilitate full and effective implementation of existing directives, encourage further horizontal cooperation between agencies within Member States and encourage the development of best practice. To those ends, Member States are called upon to meet the 10 September 2020 deadline above; to enhance horizontal cooperation between FIU, within the framework of the European Multidisciplinary Platform Against Criminal Threats (EMPACT); and to cooperate between Asset Recovery Offices, customs, tax and law enforcement authorities. The modes of cooperation would include Justice and Home Affairs agencies promoting joint investigation teams for both deterrence and investigation of organised crime.

In its conclusions the Council also pointed out that some powers of FIUs are not harmonised across the European Union, which may impact the FIUs' ability to access and share relevant financial, administrative and law enforcement information (especially those held by obliged entities and/or law enforcement authorities).

The European Commission was called upon to consider strengthening the legal framework on the freezing and confiscation of assets; to consider further enhancing the legal framework in order to interconnect national centralised bank account registries; to explore whether certain aspects of the work of FIUs could be further adapted to enable a more efficient exchange of information; to re-engage in a discussion with member states regarding the need for a legislative limitation on cash payments at EU level; and to consider the need to further improve the legal framework for virtual assets.

The Council clearly intends to build on the present legal framework. Although, further legislation is not immediately anticipated, there is strong encouragement for both the use of the existing legal framework and for policy development at the inter-state level. One particular challenge will be data protection given the involvement of private actors. The conclusions noted, the decision of the European Data Protection Supervisor to impose a ban on Europol’s data processing activities for the purposes of the administration of FIU.net. The decision’s effect was suspended for one year. Nevertheless, Europol was called on to fully use the potential of the newly created European Financial and Economic Crime Centre.

The press release can be found here.

Council’s conclusions can be found here.