According to a committee "opinion" adopted on 16 February, rapporteur M. Robert Pelletier (Group 1, France), action proposed in the draft directive limited to the EU, would be "ineffective" and might even lead to distortions of competition that would benefit financial institutions outside the EU. The committee suggests that international financial institutions should draw up a code of good conduct with the Commission, including the basic recommendations of the Organisation for Economic Co-operation and Development (OECD's) financial action task force on money laundering, known as FATF. Application of these recommendations would be one of the conditions for granting any financial aid, it said in a statement.
"Sanctions should be imposed on offshore centres that did not abide by the code of good conduct or opposed the openness of transactions. As regards the proposal to extend the area of repression to include not only non-drugs- related organised crime but also all 'serious offences', there is a real risk that the policing bodies will be swamped by too many reports of suspicions," the statement added.
The committee suggests that with experience, and provided financial institutions are given adequate feed-back on the effectiveness of their reports, the number of suspicious actions reported may decline. However, it concludes that "adequate resources must be provided by the appropriate authorities to ensure that follow-up actions are speedy and effective".
ECOSOC issues 'opinions' on most substantive EU proposals. However, an opinion, as the name suggests, is not legally binding - carrying instead political and moral weight.
To download the full text of the ECOSOC Opinion click below
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