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EU executive seeks supervisor of anti-money laundering fight

BRUSSELS – The European Union's executive arm unveiled plans Thursday for improving how money laundering and financing for extremist groups are countered across the 27-country bloc, with the goal of creating a supervising authority to ensure every member nation follows EU rules.

The European Commission's proposal describes an EU-level position with investigative powers and the job of making efforts to halt the cross-border flow of dirty-money more effective and efficient.

To develop “high-quality standards” across the EU, it will be crucial for the oversight body to have authority to conduct on-site inspections, the commission said.

“Supervision within the EU is currently member state-based. Its quality and effectiveness are uneven across the EU, due to significant variations in human and financial resources, skills and priority devoted to this task," the plan states.

The commission said it wants to implement the plan in the next 12 months.

The commission presented its proposals a week after the EU's law enforcement agency said the coronavirus pandemic would exert pressure on the financial system and banking as organized crime groups that want to launder money rush to take advantage of the volatile economic situation.

Several money-laundering scandals have rocked the EU in recent years, including a 200 billion-euro ($220 billion) scheme involving Denmark’s largest bank, Danske Bank. The scandal involved dirty money funneled from Russia and former Soviet republics to client accounts of the bank's Estonian branch subsidiary during 2007 to 2015 mainly.

Last year, the Commission identified several weaknesses in the EU strategy to fight money laundering and the financing for extremist groups. EU lawmakers and the leaders of member countries asked for proposals for better rules and coordination.

“We need to put an end to dirty money infiltrating our financial system," European Commission Vice President Valdis Dombrovskis said. “There should be no weak links in our rules and their implementation."

The Commission also presented an updated list of third countries and territories it believes have “strategic deficiencies in their regime regarding anti-money laundering and countering terrorist financing," including Panama and the Bahamas. EU members last year rejected a previous version, saying it “was not established in a transparent and resilient process.”