EU Threatens to Go After Money-Laundering Laggards With Lawsuits

(Bloomberg) --

A number of European Union countries failed to meet a Jan. 10 deadline to fully apply strict new measures against money laundering, compounding the bloc’s challenge in weeding out dirty money.

The European Commission, the EU’s executive arm, is preparing to launch so-called infringement procedures next month to get all countries to implement the rules, Valdis Dombrovskis, the EU commissioner in charge of financial-services policy, told finance ministers at a meeting in Brussels on Tuesday. The infringement action is a step in the EU’s legal process that could see a case brought before the bloc’s court of justice and result into hefty fines.

Dombrovskis didn’t say which countries missed the deadline.

“We regret this and encourage member states who still have to take steps in order to approve internally the new rules, and to do so urgently, also considering the collective interest of the Union,” Dombrovskis said.

The EU’s fifth Anti-Money Laundering Directive is meant to increase transparency around crypto assets and in the art market, among other things. The bloc is also considering more fundamental changes in its fight against illicit financial flows, for example by setting up a common agency.

The legal patchwork highlights the kind of problems the EU faces in fighting a flood of dirty funds, following revelations of money laundering at banks including Danske Bank A/S and ING Groep NV. A key problem identified by authorities is that the framework is fragmented along national lines, allowing criminal to exploit loopholes.

To contact the reporter on this story: Alexander Weber in Brussels at aweber45@bloomberg.net

To contact the editors responsible for this story: Dale Crofts at dcrofts@bloomberg.net, Nikos Chrysoloras, Richard Bravo

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