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EU Agrees New Money Laundering Rules

by Ulrika Lomas, Tax-News.com, Brussels

14 June 2018


The EU is to apply new anti-money laundering rules aimed at disrupting and blocking access by criminals to financial resources.

On June 7, European Council ambassadors confirmed the agreement reached between the Council's Bulgarian presidency and the European Parliament on a proposed new anti-money laundering directive.

Currently, all EU member states criminalize money laundering. However, definitions of criminal offences and sanctions related to money laundering vary across member states.

Under the agreed changes, the EU will introduce EU-wide definitions of money laundering-related crimes, including practices that are not currently deemed a crime in all EU countries. The EU will set a maximum term of four years' imprisonment for money laundering offences. Additional sanctions and measures may be imposed by judges, including temporary or permanent exclusion from access to public spending, and fines.

Aggravating circumstances will apply to cases linked to criminal organization or for offences conducted in the exercise of certain professional activities. EU member states may also define such aggravating circumstances on the basis of the value of property or money being laundered or the nature of the offence. It will also be possible to hold legal entities liable for certain money laundering activities, and such entities may face a range of sanctions.

In order to remove obstacles to cross-border judicial and police cooperation, the EU will set common provisions for the investigation of money laundering-related offences. In cross-border cases, the EU will also provide clearer rules to define which member state has jurisdiction and the cooperation between the member states concerned, as well as the need to involve Eurojust.

Dimitris Avramopoulos, the Commissioner for Migration, Home Affairs and Citizenship, said: "With stronger and uniform rules on money laundering across the European Union, we have tightened [the] screws even harder, making it more difficult for terrorists and criminals to get away with the profits of crime."

Commissioner for the Security Union Julian King said: "We need to hit terrorists and criminals in their pockets – cutting off their access to money is a vital part of preventing their crimes. The new rules agreed today are an important step in the fight against the financing of terrorism, helping to pave the way towards an effective and genuine Security Union."

Each year, an estimated EUR110bn (USD129.1bn) is generated from criminal activity within the EU, corresponding to one percent of the bloc's GDP. Depending on the member state, between 10 percent and 70 percent of criminal investigations involving money laundering have a cross-border dimension.

TAGS: compliance | tax | European Commission | tax compliance | tax avoidance | banking | financial services | Bulgaria | European Union (EU) | services | Europe | Tax | Tax Evasion

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