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Digital Identity, Security & Online Fraud

Brussels mandates EBA to impose sanctions on cases involving money laundering

Thursday 13 September 2018 | 01:11 PM CET

EU plans to give the European Banking Authority (EBA) a powerful new mandate to impose sanctions directly on the banks of member states related to money laundering activities.

The Brussels announcement follows several recent cases of money laundering in European banks that have given rise to concerns that gaps remain in the union’s supervisory framework. Moreover, enhancing the powers of the EBA would ensure “different supervisors cooperate and exchange information and that anti-money laundering rules are enforced effectively across EU countries”.

The proposals, which must be agreed by member states and the European parliament, would be fast tracked by amending existing legislation. The EBA would be able to order national regulators to investigate breaches and specify remedies such as sanctions. If national regulators failed to act, the EBA would have the power to step in “to address decisions directly” to banks.

The agency would be asked to act as a data hub, collecting information on money-laundering risks and trends and fostering exchange of information between national authorities. It would also facilitate cooperation with non-EU countries in cross-border cases.

The commission wants a new, permanent committee to bring together national anti-money laundering supervisors. Members of the European parliament have been calling for the creation of a single cross-border agency to step in when national regulators fail to police their banks.

Currently, the EBA’s head office is in London, but it will relocate to Paris after Britain leaves the EU in March 2019.

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