The European Commission has adopted a package of measures on December 21 to strengthen the EU’s capacity to fight the financing of terrorism and organised crime, delivering on the commitments made in the Action Plan against terrorist financing from February 2016. The proposals being presented by the Commission will complete and reinforce the EU’s legal framework in the areas of money laundering, illicit cash flows and the freezing and confiscation of assets.
The proposals were prepared by a project team led by First Vice-President Frans Timmermans and Vice-President Valdis Dombrovskis, working with Commissioners Dimitris Avramopoulos, Pierre Moscovici, Věra Jourová and Julian King.
First Vice-President Frans Timmermans stated: “With today’s proposals, we strengthen our legal means to disrupt and cut off the financial sources of criminals and terrorists. We must ensure we have the right tools in place to detect and stop suspicious financial flows and to support better cooperation between law enforcement authorities so that we can better protect the security of European citizens.”
Vice-President Valdis Dombrovskis said: “Terrorism remains a major threat to our safety. We must stay a step ahead to stop terrorists in their tracks and the fight against terrorism financing is part of it. That’s why today we are proposing that money laundering be subject to effective criminal sanctions right across the EU. We are proposing cross-border freezing and confiscation of criminal assets within the EU, and putting an end to criminals circumventing cash controls at the EU’s external borders.”
With this proposals, the European Commission is strengthening the capacity of the EU to fight terrorism and organised crime, making it harder for terrorists and criminals to finance their activities whilst making it easier for the authorities to detect and stop their financial movements. Detecting suspicious financial flows and cutting off the sources of financing is one of the most effective ways to stop potential terrorist attacks and criminal activities. The tracking of financial flows can also provide police and law enforcement authorities with crucial information and effective tools for their investigations.
Ensuring the criminalisation of money laundering
The Commission proposed a new Directive to criminalise money laundering and to provide competent authorities with adequate criminal law provisions to prosecute criminals and terrorists. The proposed measures will:
Establish minimum rules concerning the definition of criminal offences and sanctions related to money laundering, closing gaps to prevent criminals from exploiting differences between different national rules.
Remove obstacles to cross-border judicial and police cooperation by setting common provisions to improve the investigation of offences related to money laundering;
Bring the EU norms in line with the international obligations in this area, as set out in the Council of Europe Warsaw Convention and Financial Action Task Force recommendations.
Putting tighter controls on large cash flows
In order to provide competent authorities with the adequate tools to detect terrorists and those who support them financially, the new Regulation on cash controls presented will:
Tighten cash controls on people entering or leaving the EU with €10,000 or more in cash;
Enable authorities to act on amounts lower than the customs declaration threshold of €10,000, where there are suspicions of criminal activity, and
Improve the exchange of information between authorities and Member States;
Extend customs checks to cash sent in postal parcels or freight shipments and to precious commodities such as gold, and to prepaid payment cards which are currently not covered by the standard customs declaration.
Freezing terrorists’ financial resources and confiscating their assets
Freezing or confiscating financial assets quickly across borders will prevent terrorists from using their funds to commit further attacks. The proposed Regulation on mutual recognition of criminal asset freezing and confiscation orders will:
Offer one single legal instrument for the recognition of both freezing and confiscation orders in other EU countries, simplifying the current legal framework. The Regulation would apply immediately in all Member States;
Widen the scope of the current rules on cross-border recognition, to include confiscation from other people connected to the criminal, and would cover confiscation in the case the criminal is not being convicted for example due to escape or death;
Improve the speed and efficiency of freezing or confiscation orders thanks to a standard document and an obligation on the part of competent authorities to communicate with each other. The rules set cleardeadlines, including shorter deadlines for freezing orders;
Ensure victims’ rights to compensation and restitution are respected. In cases of cross-border execution of confiscation orders, the victim’s right has priority over the executing and issuing States’ interest.
