24 Apr Policy paper discussing an EU-wide financial crimes agency
Efficient tackling of money laundering and other financial crimes such as tax evasion and/or fraud in the European Union greatly depends on effective information-sharing infrastructures that rely on smart technologies and leverage various data centres and instruments.
At the European Union (EU) level, however, there is no proposition that aligns with the innovative use of ICT and smart technologies under a centralised authority to support the investigation and prosecution of financial crimes. At the same time, there is no exchange system or mechanism in the EU that leverages national activities in the field of money-laundering and other financial crimes
This policy paper employs findings from previous research and relevant literature to make a case for the establishment of an EU-wide agency with competence to provide bespoke information-sharing infrastructure for fighting different types of financial crime including tax crimes, general fraud, money laundering, terrorism financing, and corruption.
Having analysed the existing information-sharing platforms and institutions, the policy paper provides alternatives for positioning and operationalising such an entity and makes recommendation for the selection of the most suitable one.
Essentially, two broad challenges are addressed by this policy paper.
- The first relates to the poor exchange of information mechanisms that undermine the effectiveness of anti-money laundering (AML) and broader measures of countering financial crimes such as tax crime, money laundering and corruption.
- The second broad challenge is the intransigent misunderstandings that have often been occasioned by the inability of law enforcement agencies (LEAs) and other competent authorities to effectively exchange information on suspicious activities, best practices, new methods, trends and expertise.
These challenges open opportunities for criminal networks and activities to prevail in the financial industry. It is imperative for the establishment and consolidation of pillars and instruments that break these barriers to enhance harmonious, ‘rapid, meaningful and comprehensive sharing of information from a wide variety of sources, across the national and global scale’.
- Establish an EU-wide agency with capabilities of tackling different financial crimes. This should not be a department in an existing agency because the existing agencies are already preoccupied and the task the new agency is to handle is enormous.
- Build expertise of national authorities as the technical expertise of national authorities such as tax administrations and other LEAs are struggling to cope with the increase in volume and complexity of commercial and financial transactions, their processing, and sharing.
- Improve financial transparency by curtailing or abolishing bank secrecy and other confidentiality laws and enhance data collection instruments by producing quality data for analysis based on reliable and comparable national databases.
- Foster public-private, public-public and private-private information-sharing to ensure that voluntary information exchange from and with any other entity (whether private or not) is highly encouraged deliberately.
- Policymakers need to maintain a careful balancing-walk between protecting the data and privacy rights and ensuring that no stone is left unturned to exchange relevant information for an effective fight against financial crime.
Please note that the law cited were valid and correct at the time of the reports publication.