To combat terrorist financing, the European Parliament on September 12 approved two laws aimed to prevent money laundering and tighten cash flow checks.
The two laws will make it easier for the authorities to detect and stop suspicious financial flows. For instance, they introduce EU-wide definitions of money laundering-related crimes. They also introduce EU-wide minimum penalties, such as a minimum of four years of imprisonment for money laundering maximum sentences.
The new rules on the criminalisation of money laundering were approved by 634 votes to 46, and 24 abstentions.
On cash flows, the new rules extend the definition of cash to include gold and anonymous prepaid electronic cash cards. Authorities will also be allowed to register information about cash movements below the current €10,000 threshold and to temporarily seize cash if they suspect criminal activity.
The new rules on cash flows were approved by 625 votes to 39, and 34 abstentions.
“The rules prevent criminals from financing their activities – legal or illegal – with the proceeds of illicit actions,” said Rapporteur Ignazio Corrao (EFDD, IT). “Money laundering is a dangerous crime and its harmful consequences are often underestimated. This directive adds a new important tool to fight against this crime.”
Rapporteur Juan Fernando López Aguilar (S&D, ES) stressed the need for the EU to reinforce its controls over cash entering or leaving its territory. “We have incorporated the best practices at international level to new rules and solved some deficiencies and shortcomings of the current legal framework.”
According to Mady Delvaux (S&D, LU), criminals use cash because it’s difficult to trace and easy to transfer. “With this regulation, we are strengthening the tools to combat money laundering and terrorist financing through better and faster exchange of information between authorities, as well as by adopting a more complete definition of cash.”
Similarly, S&D Group spokesperson on economic and monetary affairs, Pervenche Berès, noted that “billions of euros are laundered every year, also due to differences in national approaches. The integrity and stability of the EU’s financial system is at stake”.
Emil Radev MEP, the EPP Group’s Spokesman on the proposal, said: “The EPP Group set the prevention of terrorism financing as one of our key priorities in the fight against terrorism. Today, we took an important step in delivering our goals. However, we made sure that while these loopholes are being addressed, better common rules are being set and information is being shared between the Member States, we won’t increase administrative burdens for EU citizens sending money from and within the EU.”
“This dossier is relevant for the security of the cash entering or leaving the Union. Our work has produced a positive result and I am proud to represent the EPP Group”, added Fulvio Martusciello, the EPP Group’s negotiator in Parliament’s Economic and Monetary Affairs Committee. “One important aspect is the fact that collecting penalties remains something to be decided by member states, however an equivalent deterrent must be constituted across the EU, forming a condition that goes against the ‘penalty shopping’ principle for criminals.”
The new measures now require formal approval by the European Council. EU member states will then have two years to implement the rules on money laundering and 30 months to apply the cash controls directive.