EC Adopts Report On Implementation Of Money Laundering Framework Decision

by Ulrika Lomas, for LawAndTax-News.com, Brussels

28 February 2006

The European Commission announced last Thursday that it has adopted a second report on the measures taken by the Member States to comply with the Council Framework Decision of 26 June 2001 on money laundering, the identification, tracing, freezing, seizing and confiscation of instrumentalities and the proceeds of crime.

The report revealed that the new Member States, assessed for the first time in this area, have satisfactorily implemented the main elements of the Framework Decision, but there are still some legal ambiguities here and there which need to be corrected. It also noted that only some of the countries assessed in the first round have taken corrective measures in response to the observations made after the first assessment.

The report has been sent to the European Parliament, the Council and the European Economic and Social Committee, and includes an attachment which specifies, for each article of the Framework Decision, the implementing provisions taken by each of the Member States.

According to the EC, Malta has provided no information regarding its progress in implementing the Framework Decision, and the information provided by the Greek authorities is still incomplete.

It announced that:

"As in the case of the countries assessed in the first round, some assessments and conclusions may be based on patchy information. However, the new Member States have generally fulfilled their obligations relatively well, although the Commission once more considers that far more information is needed to assess the implementation of Articles 3 (Value confiscation) and 4 (Processing of requests for mutual assistance). Apart from these general remarks, the present situation can be described as follows:

Reservations in respect of the 1990 Convention (Article 1): of the new Member States, Malta and Hungary will probably need to review the content of their reservations. Of the other Member States, Sweden, Spain and Portugal have complied with Article 1.

Penalties (Article 2): This Article has been implemented properly in the new Member States that sent information. However, Hungary could reword the provision automatically exempting all those who expose money laundering activities, and also the definition of the offence of money laundering.

Value confiscation (Article 3): Latvia does not appear to have such a procedure and in Austria the confiscation procedure only comes into play above a threshold higher than the provisions of Article 3. For confiscation procedures following foreign requests there was little extra information to add to the conclusions drawn after the first assessment.

Processing of requests for mutual assistance (Article 4): The Commission restates the position it took after the first assessment, i.e. that it does not have enough information to consider that this provision has been specifically implemented.

Territorial application (Article 7): The Framework Decision has not been implemented in Gibraltar."

On the basis of this information, the Commission will decide whether it is necessary to propose a Community act to help make the arrangements for enforcing money-laundering legislation more consistent and more effective.

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