Council of the European Union objection to AML Delegated Regulation
The Council of the European Union recently voted unanimously to object to the Commission's delegated act identifying high-risk third countries with strategic deficiencies for the purposes of the money laundering directives (4MLD and 5MLD). The proposed act includes countries such as Puerto Rico and the US Virgin Islands on the list of high-risk third countries for the first time.
In a strongly-worded statement on 5 March 2019, the Council stated that it could not support the current proposal because it "was not established in a transparent and resilient process that actively incentivises affected countries to take decisive action while also respecting their right to be heard". The Council called on the Commission to produce a list that meets the Council's "high standards and thereby further strengthens anti-money laundering and the combat against terrorist financing".
The criticisms of the Council are similar to those expressed by the US Department of the Treasury (the Treasury) on 28 February 2019, which advised that it did not expect US financial institutions to take the Commission's list into account in their AML/CTF policies and procedures. The Treasury expressed "significant concerns" about the substance of the list and what it termed the "flawed process" by which it was developed. The Treasury contrasted the "thorough methodology" of the Financial Action Task Force with that of the Commission, which it criticised for not including "a sufficiently in-depth review" and for providing affected jurisdictions with "only a cursory basis for its determination".
For more information on this topic please contact Kenan Furlong, Partner, Paula Reid, Partner or any member of A&L Goodbody's Litigation & Dispute Resolution team.
Date published: 20 March 2019