EU money laundering law „flawed'

The way member states implemented the 2001 directive „fell short" of creating a consistent regime for tackling crime, a City of London report has concluded. Procedures for identifying and reporting suspicious transactions differed between countries, it said. Some members took too long to report suspicious deals, ruling out action. The report was critical of the way in the which the law, which extended the scope of existing regulations to include the proceeds of all serious crime not just drug trafficking, was implemented. It analyzed how the directive, which was supposed to come into force in member states in 2003 and accession countries in 2004, was enacted in six countries - UK, Spain, Italy, Greece, Poland and Lithuania. Two of these - Italy and Greece - failed to implement the directive on schedule while there were major discrepancies in its scope and interpretation across different countries.

Different offences are covered by different countries. Greece includes crimes involving the protection of antiquities while Spain excludes bribery. Monitoring and enforcement of the directive differs wildly from country to country. Procedures for reporting suspicious transactions differ significantly. Lithuania and Poland require all transactions worth more than €15,000 to be reported, irrespective of any suspicions of corruption. Reports are made by post in Italy, meaning transactions are likely to be concluded before any action can be taken. Reporting of non face-to-face transactions is unclear and inconsistent.

One area of recurring concern was the requirement in the law for a wide range of businesses including estate agents, lawyers, accountants and dealers in expensive goods to report any suspicious deals. The report found that accountants, for instance, were providing different services in different countries, making it impossible to enforce a consistent reporting standard. At the same time, claims that some individuals should be exempt on the grounds of professional privilege and human rights law have become the subject of legal challenges in at least three countries. The City of London said an "effective" anti-money laundering regime was essential to maintaining the integrity of the global financial system. „Within the EU, it is also vital that this regime operates in an uniform manner," said Michael Snyder, chairman of the body's policy and resources committee. „This report makes clear that implementation of the directive fell some way short of producing a uniform anti-money laundering regime across the EU." (BBC NEWS)