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Abstract
[...]Graham Thomas, partner at strategic advisory firm Herminius, said that rather than European AML regulation being at fault, the Danske Bank scandal reflects how AML rules are applied and enforced by national regulators and interpreted by financial institutions themselves. Because of this, another AML scandal comparable to Danske is almost certain unless things change. Danske is said to have had very different procedures in place for its Estonian branch compared to other branches of the business.Response Last week, in a clear indication that the EU is concerned about the scale of the issue, the EU Commission proposed creating the EU’s first cross-border AML force. Since 1989, money laundering has been the concern of the Financial Action Task Force, but enforcement is said to be far too domestic-focused, meaning that criminals can exploit multiple jurisdictions at the same time and take advantage of the lack of cross-border collusion. The Danske scandal alone involved 32 currencies for example.The European Banking Authority is set to be given the power to intervene where it believes national regulators are failing, but it is unable to prosecute banks’ criminal customers, which significantly limits its enforcement power.And then, while the fifth AML directive was adopted in April 2018, which will establish a centralised and public register of companies and their beneficial owners, the deadline for member states is 2020.