EU, FIUs, STRs and AML

Last week Europol – or, more fully, the European Union Agency for Law Enforcement Cooperation – published a report entitled “From Suspicion to Action – Converting financial intelligence into greater operational impact”.  The report examines the AML framework within the EU, and looks at the extent – and outcome – of suspicious transaction reporting in the EU.  The headline stats are sobering:

  • In 2014 – the most recent year for which full statistics are available for analysis – FIUs across the EU received a total of a million reports
  • Of those, 65% were received by the FIUs of the UK and the Netherlands
  • 10% of reports are investigated further – a proportion that has not changed since 2006
  • In 2013/14, reports on terrorist financing accounted for less than 1% of reports made
  • The sectors that make the most reports are banks and money service businesses; those that make the fewest are bureaux de change and high value dealers
  • “Between 0.7-1.28% of annual EU GDP is detected as being involved in suspect financial activity”, which is – as admitted in the report – “far short of [accepted] estimates around the amount of money laundered through the financial system”.

Europol Executive Director Rob Wainwright is aware that this final finding is the one that will concern people – why is such a small proportion of criminal proceeds being identified and therefore made available for possible confiscation?  And his explanation is a sensible one: “The anti-money laundering regime still operates at a domestic level, and has not yet fully adjusted to the reality of a problem that is defined by its international nature.  While structures exist to facilitate cross-border cooperation between national units, significant barriers in international cooperation and information exchange remain, revealing the urgent need for supranational overview in increasingly global markets.”

As ever, we are a step behind the criminals.  Unshackled by laws or morals, they are infinitely adaptable and will co-operate with anyone, anywhere in the world, for as long as it suits their purpose.  We need to learn to do the same: the risks of sharing information and expertise are far outweighed by the benefits, and we do, after all, now operate in a risk-based AML environment.

This entry was posted in AML, Money laundering, Publications and tagged , , , , , , , , . Bookmark the permalink.

2 Responses to EU, FIUs, STRs and AML

  1. ddd4182 says:

    interesting to see how Luxembourg reporting has been skewed in all areas within this report by Paypal obtaining a banking licence there in 2007.
    I suspect that electronic payment companies are not identified separately from banks by most countries FIU’s, therefore the impact of Fintech and any associated risks cannot be assessed accurately.

  2. Thank you for your comment, ddd4182 – a timely reminder that headline statistics have to be carefully dissected and understood.

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