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France, Germany Seek Tougher AML Regulations

Monday, April 29, 2013

Germany and France have called for European anti-money laundering regulations to be toughened, as part of efforts to clamp down on tax evasion.

In a joint letter addressed to the European Commission, French Finance Minister Pierre Moscovici and his German counterpart Wolfgang Schäuble underlined the need for an "ambitious European approach" to combat money laundering and financial crime. Protecting the integrity of the internal market from illicit financial flows and from non-cooperative jurisdictions, that deprive national budgets of vital fiscal resources, is a central objective of French and German economic policies, the Finance Ministries explained.

Ahead of negotiations in Brussels on a fourth Anti-Money Laundering (AML) Directive, France and Germany have therefore urged the European Commission to adopt a leading role in the fight against money laundering. It is vital that the Commission develops an appropriate risk management strategy, to serve as a framework for financial institutions in their fight against money laundering, the Ministries noted.

France and Germany are also calling for a better harmonization of national anti-money laundering regulations. The Ministries stressed that the fourth AML Directive therefore marks an important step towards enabling national authorities to identify the ultimate beneficiaries of trusts and legal entities, thus increasing the transparency of financial flows. France and Germany have also requested that the European Commission oversee and control the implementation of anti-money laundering regulations by member states.

In their letter, Ministers Schäuble and Moscovici advocate that the European Union leads the global fight against financial crime, developing a European policy against non-cooperative jurisdictions, to reduce difficulties and barriers to combating tax fraud and money laundering. The Ministers propose that the Commission should work together alongside EU member states, to identify non-cooperative jurisdictions and to develop measures, designed to protect the integrity of the internal market from these countries. This might include the possibility of limiting the activities of European financial institutions in these states, the Ministers concluded.