We have had years of scandals and leaks when it comes to money laundering. From banks, to football clubs, financial institutions, celebrities and Russian oligarchs – in the last decade we have lived through more money laundering scandals than we should have in a century. But what is money laundering? What is the EU Anti Money Laundering Authority? And what are the Greens in the European Parliament doing to stop money laundering in the EU?
The Greens/EFA MEPs, Kira Peter-Hansen and Ernest Urtasun, explain.
What is money laundering?
Money laundering is a process that involves “washing” money made illegally to make it seem like it comes from a legal source or to get rid of it. An example could be a criminal making large amounts of money from selling drugs and then buying a private jet in cash to get rid of it.
The Greens/EFA have been campaigning for years for more transparency and effectiveness when it comes to stopping money laundering. Two years ago, the European Commission came forward with a package of legislation to fight money laundering. It already met a lot of our group’s long-standing demands.
Shortly after this publication, the biggest leak in history – the Pandora Papers – came to light. The new laws had proved to be more needed than ever. But it was time to ramp up the ambition on the proposal. Putin’s war of aggression in Ukraine also showed the role of murky oligarchs and dirty money in fuelling and perpetuating a senseless attack. And in the midst of all of this, we now have a cost of living crisis. Millions of people have to decide whether to heat their homes or eat a warm meal. Meanwhile, a few people get richer and richer and new billionaires appear at an exponential rate.
On March, the European Parliament voted on its position on the package that the European Commission put forward. It will now go into negotiations with the Finance Ministers of the different Member States to agree on the final texts.
Today we can say that significant progress has been made. A lot of our Green wishes are now Green wins.
Here are our five Green wins in the fight against dirty money:
- The EU now has an Anti-Money Laundering Authority (AMLA).
The financial institutions most exposed to money laundering will now be under direct supervision at EU level. But that’s not where its success and power ends. This new authority has power over national supervisors. What does that mean? It means that if there is corruption in a country and those who are behind it are not being properly investigated by their government, the AMLA can intervene and investigate on its own. There’ll be no rest for money launderers in the EU, thanks to the AMLA.
The Parliament also wants to empower the AMLA to blacklist third countries, individual banks and other financial institutions which pose a threat of money laundering to the EU. This would allow the EU to protect our financial system from specific threats, as the US already does. We’d be able to immediately respond to money laundering scandals outside the EU. For example like with what we’ve seen happening to Credit Suisse.
- No more sweetheart deals, thanks to a harmonised regulation against money laundering in the EU. This regulation harmonises all the legislation on anti-money laundering in the EU and makes it directly applicable in all EU countries. So, any country that was postponing fighting money laundering can no longer do so.
- One of the main things that the European Parliament has achieved is the ban on golden visas. Some countries were still offering sweetheart deals to big fortunes (and Russian oligarchs). That means that they were giving them the nationality of the country in exchange for an investment in the country. So a rich person from outside the EU could make a large investment or buy real estate in Malta. This would make them eligible to get the nationality and not even live there! Thanks to the regulation, there will be no more sweetheart deals on nationality for oligarchs and millionaires.
- New sectors, such as luxury goods, NFT and football, will be subject to anti-money laundering checks. We managed to substantially increase the list of professionals and companies required to conduct anti-money laundering checks on their clients, look at suspicious transactions and report them to the authorities. The fight against money laundering cannot rely solely on banks and other financial institutions. It will also be a responsibility of legal professionals, crypto companies, NFT platforms, traders in luxury goods and high level football clubs. The FIFA scandal and other dirty money schemes using crypto have shown that dirty money goes beyond banks. Now, anyone trying to launder money with bitcoin, NFTs, football clubs or even the purchase and sale of a Picasso, a Rolex or a yacht will be identified and checked for money laundering schemes. Banks, financial institutions and companies will also need to apply stronger checks on politicians and their families. This includes Heads of State, local authorities and wealthy individuals linked to fossil fuels, mining and offshore financial centres.
- No more hiding money in yachts, mansions and private jets. Using it to buy luxury items, like super yachts, mansions or private jets camouflages dirty money. If Ministers agree, the EU will have a registry for all real estate, luxury cars, jets and yachts, along with the details of their owners. So the next time you go to the beach and you see a huge yacht, authorities will know if it belongs to a Russian oligarch. And if the purchase was made to hide dirty money. This win is a great push in our fight for more transparency. And it brings us one step closer to a European asset registry.
- Access to information is back. In November, the European Court of Justice forced the fight against corruption and dirty money to take a big step back. However, we have fought back. In our fight for more transparency and justice, we have succeeded in securing access to the databases where the “real owners” of corporations and trusts are listed. Access will be granted for NGOs, journalists, academia and other essential organisations. We have fought to make sure that every person who owns shares of a company will have to be listed. There is no more hiding under complex structures like we saw in the Pandora papers! Thanks to this, investigative journalism, crucial research and advocacy by civil society can continue. Because if we can’t see who is behind a lobby or a corporation doing dirty deals, we will never be able to have real justice and transparency.
As the Greens/EFA in the European Parliament, we are super proud of these five wins in the fight against money laundering. We have taken huge steps to fight corruption, dirty money and opaque structures. And we are glad that the European Parliament has stepped up and shown ambition. Now, the negotiations continue. It is time for Member States to meet us at this level of ambition and to finally make sure that dirty money is no more.
Join us in the fight for an EU that works for the 99% – and not for billionaires and oligarchs.