Anti-money laundering

The EU relatively stable political and institutional environment makes it an attractive destination for laundering the proceeds of criminal activities. Research estimates that illicit markets in the European Union generated about 110 billion EUR, i.e. approximately 1% of the EU GDP in 2010. Huge amounts of illicit flows are also leaving the EU. According to the European Commission, up to 1 trillion EUR could be lost every year by the EU due to tax fraud and evasion.

Not only does this constitute a serious threat to the EU financial stability and security, but also by diverting money from the public purse, it contributes to distorting public policy, eroding the role of the state as a public service provider and undermining citizens´ rights and trust in their institutions.

The EU plays a key role in preventing, detecting and stopping illicit money flowing in and out of the EU including by:

  • Establishing a strong European legal anti-money laundering framework in particular through the revision and implementation of the 4th Anti-Money Laundering Directive and its regular monitoring and assessment through the Supranational Risk Assessment and other initiatives such as the work carried out PANA Inquiry Committee.
  • Strengthening the role of intermediaries as gatekeepers of the European financial system
  • Promoting responsible asset recovery processes within the EU and facilitating cooperation among Member States
  • Promote integrity and transparency standards in the issuance of so-called golden visas, i.e. passports or residence permits granted to wealthy third country nationals by Member States in exchange for substantial investment in key economic sectors.

Transparency International EU provides policy analysis and recommendations and advocate for policy change at EU and Member State levels in a number of policy areas including:

Beneficial ownership

Since 2013, Transparency International EU has been monitoring closely EU legislative processes related to the adoption of stronger European anti-money laundering standards, in particular on aspects related to beneficial ownership transparency. Transparency international EU advocated for the adoption of  stronger beneficial ownership transparency standards as part of the revision of the 4th Anti-Money Laundering Directive adopted in December 2017. The new EU rules establishes public access to beneficial ownership information as a principle. 

To support its advocacy work, Transparency International EU carried out evidence-based research and analysis on the current state-of-play of beneficial ownership transparency standards and practices. Its most recent findings are summarised in a report Under the Shell: Ending Money Laundering in Europe published in April 2017. 

Professional enablers

Professional enablers such as accountants and real estate agents play an essential gatekeeping role in the fight against money laundering. Transparency International seeks to increase engagement with the accountancy and real estate professions on anti-money laundering issues and in particular, how to strengthen the effectiveness of business anti-money laundering practices. In this respect, it has set up taskforces involving experts and practitioners for a cross-country exchange on common challenges faced by those sectors and existing good business practices.      

Asset recovery

According to estimations, European authorities had been only able to recover €1.2 billion each year. This is 1.1% of the €110 billion, which Transcrime Institute estimates that illicit markets in the European Union generate.  A number of legal, institutional and political barriers need to be overcome in order to guarantee responsible repatriation of illegally acquired assets. To further the efforts for recovering stolen assets, Transparency International EU is leading an initiative aimed at exploring the role the EU can play in facilitating responsible asset recovery focusing on the grand corruption case of Uzbekistan.

Golden visas

Following the 2008 financial crisis, new kinds of investor schemes have blossomed across Europe with the aim to offer fast-track residency or even citizenship to third-country nationals in return for investments in the national economy.  Although, increased foreign investment in key economic sectors in Member States may seem very welcome, these programmes also raise serious concerns that these schemes may offer easy access and legitimate cover for money launderers wishing to introduce substantial amounts of illicit money in the market. Another characteristic of these schemes is that they essentially rely on their capacity to offer free access to the Schengen area. As such, the lack of transparency and checks over these schemes risks undermining EU core values and citizenship principles. Aware of the European dimension of the issue, Transparency International EU is advocating for an EU-level intervention to ensure Member States adopt stronger integrity and transparency standards in the management of these schemes.