Current and future European Commission AML/CFT activities

Current and future
European Commission
AML/CFT activities
Henny Bakker
Coordinator FIU-NL Team
Counter Terrorism &
Proliferation Financing
Financial Intelligence UnitThe Netherlands
SUBJECTS
• AML/CFT and Proliferation Financing (PF)
• New EU Payment systems
AML
• Third EU AML/CFT Directive
• FIU Platform
• Trends EU regulators
THIRD EU AML/CFT DIRECTIVE
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Identification high risk transactions and UBOs
Extra attention on PEPs
Detailed Customer Due Diligence
Introducing traders in goods as reporting
entities (threshold cash payments EUR
15.000)
EGMONT annual report 2010:
EUROPE REGION
The third European Union AML-CFT directive is an important change for European countries, as it
brings European legislation up to date with international requirements. In the revision of
transposition of the 3rd European Union AML-CFT directive by the European Commission in
January 2010, only two (2) countries had not implemented the directive, while two (2) others have
done it partially.
FIU PLATFORM
• Informal group set up by the EU Commission
• Facilitate cooperation and exchange
information among FIUs EU Member States
• Identify problems and good practices in
framework of the implementation of the third
EU AML/CFT Directive
• EU Services participate and support Platform
TRENDS EU REGULATORS
• Euro crisis show difficulties for National
Banks to oversee the total picture (Iceland)
• Banks operate in different jurisdictions
• EU regulations create Single European
Payment Area (SEPA)
• Regulators can only act nationally
CFT
Counter Terrorism
– Terrorist Finance Tracking Program (TFTP)
– Terrorist Finance Tracking System (TFTS)
– Proliferation Financing
TERRORIST FINANCE TRACKING SYSTEM
(TFTS)
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EU-US agreement
US demands bulk data with nexus to terrorism
Nexus to terrorism checked by Europol
OK Europol SWIFT sends data to US
EU member states can make a request to US
US sends “leads” via Europol to EU member
state
• US can share “leads” spontaneously
http://ec.europa.eu/commission_2010014/malmstrom/archive/TFTP%20II%20Draft%20Agreement%2011%20June%20initialled.pdf
http://www.treasury.gov/resource-center/terrorist-illicit-finance/Terrorist-Financeracking/Documents/Final%20Updated%20TFTP%20Brochure%20(8-5-11).pdf
TERRORIST FINANCE TRACKING PROGRAM
(TFTP)
• European Union Commission proposal
• SWIFT data in EU database
• Request with nexus to terrorism from US to
TFTS data
• “Leads” found disseminated to the US
• Accessible to all EU Member States
http://www.europolitics.info/commission-mulls-options-for-eu-tfts-art309909-40.html
PROLIFERATION FINANCING (PF)
COUNCIL REGULATION (EC) No 1110/2008 (1011-2008) amending Regulation (EC) No 423/2007
concerning restrictive measures against Iran
• Appointing FIUs as central point of
information
• Reporting obligation of transactions with risk
for PF
• Reporting transactions of named Iranian bank
PROLIFERATION FINANCING (PF)
• Difficult subject for banks
• Need for expertise
• Support from FATF PF report
FATF rapport Proliferatie Financiering, http://www.fatf-gafi.org/dataoecd/32/40/45049911.pdf
Add info: http://www.exportcontrol.org/library/conferences/2706/02_Day_1-Plenary-Afternoon2-Walker.pdf
NEW EU PAYMENT SYSTEMS
One European payment area
• Single European Payment Area (SEPA)
• Payment Service Directive (PSD)
SINGLE EUROPEAN PAYMENT AREA (SEPA)
• Cross-border retail payments
• Self-regulatory initiative by banking sector
(represented in the European Payment
Council (EPC))
SEPA not free of costs, European Parliament
mandated that banks may only charge the
same amount as for domestic transfers
SINGLE EUROPEAN PAYMENT AREA (SEPA)
OBJECTIVES
• Standardization of euro payments: equal time limits, equal fraud-risk
levels, equal processes, all-electronic straight through processing, no
differences between national and international payments in the SEPA
area; strengthening trust and reliability on a pan-European basis.
• Competition in respect to higher number of competitors, fewer niches or
special fields or incompatibilities through standardization.
• Reduction of costs of electronic money and of payment transactions
through competition at the side of payment providers and banks – both
are considered as the biggest losers of the SEPA standardization process
at an estimated € 40,000,000,000 per year.
• Reduction of cash money and increase of electronic money through
reduction of costs of electronic money.
• Increasing surveillance of (electronic) money flow particularly regarding
money laundering (unofficially also for surveillance of illicit work [10–
30% of GDP's], organized crime and taxes).
SEPA CONSISTS OF 32 COUNTRIES:
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the 17 members of
European Economic
Area(EEA) and EU that are
in the Eurozone
the 10 members of EEA and
EU that are not in the
Eurozone,
the 3 members of the EEA
that are not in the EU:
Liechtenstein, Iceland and
Norway is not part of the
EEA)
1 non EU country that uses
the Euro by agreement with
the EU, but is not officially
part of the Eurozone:
Monaco
Switzerland
Including the following territories that are considered to be part of the EU in accordance with Article 299 of the Treaty of Rome:
Martinique, Guadeloupe, French Guiana, Réunion Gibraltar, Azores, Madeira, Canary Islands, Ceuta and Melilla and Åland Islands
SINGLE EUROPEAN PAYMENT AREA (SEPA)
• For credit transfers: SCT–SEPA Credit
Transfer
• For direct debits: SDD–SEPA Direct Debit.
(Banks 2009)
• For credit cards: SEPA Cards Framework
• Since 1/2008 banks are migrating customers
2011 SEPA payments will replace all national
payments in the Eurozone
Info: http://ec.europa.eu/internal_market/payments/sepa/
PAYMENT SERVICE DIRECTIVE (PSD)
• Level playing field by harmonizing customer
protection and the rights/obligations for
payment providers
• Payment service providers (Non banking
institutions like money transfer remitters)
Info: http://ec.europa.eu/internal_market/payments/framework/index_en.htm
PSD CONCERNS
• API registered EU member state A can open
offices in all other EU member states
• Need for leveling regulation and supervision
• Remitters register in EU member state with
the lowest grade of regulation
• Regulator in EU member state B can not take
measures against PSD office, API is
registered in EU member state A.
• Regulator in EU member state A has to take
regulative actions against office in EU
member state B.
CONTACT
Henny Bakker
FIU-The Netherlands
Tel: +31 79 3459391
Mob: +31 650680249
Email: henny.bakker@klpd.politie.nl