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On Thursday, June 11th, the European Court of Auditors announced that it would start an audit of EU’s active measures against money laundering in the banking sector. The announcement comes after the release of a new action plan on preventing money laundering and terrorism financing by the European Commission.

In its audit preview, the European Court of Auditors (ECA) summarised the bloc’s current legal framework for anti-money laundering and the roles member states play in it. The document also makes reference to the upcoming audit “in the context of renewed emphasis by the Commission, the Council and the Parliament on the need to review and consolidate the EU’s policy and practice on AML”.

As reported by The Brussels Times, Mihails Kozlovs, the ECA member responsible for the audit, commented:

“Given the enormous scale of this criminal practice [money laundering], including in the EU, and a number of recent high-profile scandals involving banks, we have decided to audit the effectiveness of the EU’s action in the fight against money laundering in the banking sector”.

According to the preview document, the audit will primarily focus on the following areas:

  1. The transposition of EU legislation in Member State law
  2. The management of risks to the internal market
  3. Coordination among national and EU supervisory bodies
  4. The EU’s action to remedy breaches of its AML law at national level.

The audit will be concluded in the first half of 2021 and might influence new EU measures.

According to an estimation by the UN Office on Drugs and Crime, the amount of money laundered every year is the equivalent of 2.7 % of the world’s GDP. That is hundreds of billions of euros in suspicious transactions within Europe alone every year, according to the EU law enforcement agency Europol.

Know Your Customer’s CEO & co-founder Claus Christensen recently took part in a panel discussion at the Digital Finance Outreach 2020 virtual event, an initiative launched by the European Union to better understand, foster and stimulate the FinTech ecosystem across the bloc. As recounted in this article for Finextra, one of the key themes that emerged during the panel was the need for a more cohesive approach to financial regulation across the EU, especially in the area of anti-money laundering and counter-terrorism financing. The new audit together with the recently announced Action Plan might represent important steps in this direction.

For weekly updates on international money-laundering, KYC and financial regulations, make sure to follow Know Your Customer on Twitter and LinkedIn.

For a comprehensive overview of current AML regulations in the European Union and their impact on KYC compliance for financial institutions, download our white paper here.

Last updated on April 23rd, 2023 at 07:33 pm

Claus Christensen

Claus Christensen is the CEO & Co-Founder of Know Your Customer. His vast array of previous experiences includes founding a technology company that develops email server infrastructure products for 60,000+ global customers and serving as VP Electronics at Thielert Aircraft Engines. A regular contributor to leading industry publications and a recognised expert in the anti-money laundering and financial regulation space, Claus is also the host of the RegTalks podcast and a senior lecturer of the Centre for Finance, Technology and Entrepreneurship (CFTE)’s RegTech Course.