By Samantha Sheen, AML Director Europe, ACAMS
17 November, 2016

“Honestly, I think it’s a ‘Here we go again” thing.” – Derek Mazeitis, University Football (Soccer) Coach

In Canada, the hockey season is underway. When I was a kid at school, collecting hockey cards was very popular. At lunchtime, we would stand around in the playground and go through our cards to see what players we didn’t have yet. As a friend showed you their cards one by one, you would say, “Need it” (I don’t have that card) or “Got it” (I have that one already).

On 25 October 2016 the European Parliament adopted a resolution called, “Fight against corruption and follow-up of the CRIM resolution (2015/2110(INI)” (“Resolution”). This adds to the growing number of documents being produced here in Europe on how financial crime should be prioritised and addressed.

The sheer volume of initiatives proposed or required (in government action plans, proposals, academic papers and legislative committee hearings) can give the impression that European countries are far behind when it comes to taking steps to bolster the fight against financial crime.

So I feel this might be a good time to play “Need it, Got it” with the Resolution, to get some perspective on how close (or far) our jurisdictions are from having these types of measures in place.

Here’s my “card list” of some of the actions in the Resolution.
If you work in a Member State (and yes, I’m including the UK), take a moment to consider whether your jurisdiction has in place (“Got it”) or plans (“Need it”) to introduce these types of measures:

Overall – More Effective Measures to Fight Financial Crime

  • Promote the fight against tax havens, banking secrecy and money laundering, corruption and human trafficking
  • Require public country-by-country reporting by multinational corporations
  • Establish public registries of beneficial owners of companies as a priority
  • Swiftly transpose the 4MLD

Misuse of Corporate Structures / Greater Beneficial Ownership Transparency

  • Introduce measures to make it more difficult to create complex and dense structures of “interlocked companies” or corporate structures
  • Require any foreign company that plans to hold property be held to the same standards of transparency as a domestically-incorporated company

Strengthen Tools Available to Law Enforcement

  • Provide more financial support for law enforcement and cross border investigatory bodies
  • Make membership in a criminal organisation a criminal offence, separate from the commission of target crimes
  • Set up secure and effective mechanisms to ensure that investigations into organised crime are properly coordinated and that mutual trust among law enforcement authorities is fostered
  • Strengthen/improve the efficiency of/step up cross–border cooperation and information-sharing, and ensure proper training and technical support of those who perform this work
  • Establish powers for the confiscation of the proceeds of crime and ensure mutual recognition of seizure and confiscation orders from other EU countries
  • Strengthen measures relating to the tracing, freezing and confiscation of proceeds of crime by:
    • criminalising the transfer of ownership of capital or property in order to avoid freezing;
    • introducing confiscation measures where ownership cannot be verified; and
    • allowing for the freezing of assets prior to a final conviction being obtained
  • Promote the management of frozen and confiscated property and its re-use for social purposes and compensation for victims and their families
  • Develop administrative, police and judicial cooperation to trace, seize and confiscate criminal assets
  • Impose criminal penalties for managers and banks where large amounts of money have been laundered

Transparency and Transactions

  • Ensure full transparency of bank flows for individuals, legal entities and trusts
  • Establish measures to increase transparency of monetary transactions and improve the traceability of transactions back to natural persons (‘follow the money” principle)

Bribery and Corruption in the Public Sector

  • Require contractors to reveal their full corporate structure and beneficial owners before being awarded contracts to prevent their misuse for aggressive tax planning, tax fraud and evasion and corruption
  • Require greater transparency around decisions concerning licensing and planning permissions issued by regional and local governments
  • Rotate public officials to prevent corruption and infiltration by organised crime groups
  • Create mandatory rules making anyone convicted of participating in organised crime, money laundering, corruption or other serious offences, ineligible to stand for election or work in or for the public service 
  • Implement public procurement monitoring so blacklists can be established – covering those with proven links to organised crime and those who have engaged in corrupt practices

“Tax Havens”

  • Pay special attention to “tax havens” and countries that pursue non-transparent or harmful tax practices
  • Implement effective monitoring of tax fraud and evasion measures at the international level (referring to the OECD automatic exchange of tax information initiative)
  • Deter asset transfers to non-EU countries that serve as “anonymity protectors for corrupt individuals” and to reconsider economic and diplomatic ties with these countries

Organised Crime and Terrorism

  • Ensure the financing/support of terrorism by organised crime is made a criminal offence
  • Ensure the interlinking of organised crime and terrorist activities and financing are taken into account in criminal proceedings
  • Take measures to ensure that terrorist organisations and criminal networks don’t benefit from trading in firearms, oil, drugs and wildlife, and smuggling of migrants, cigarettes and counterfeit goods, artworks and other cultural objects

Organised crime and human trafficking and smuggling

  • Participate in international cooperation measures to combat trafficking to eradicate people-smuggling and minimise the influence of trafficking networks