The European Economic and Social Committee (EESC), an EU advisory body made up of workers' and employers' organisations, has heavily criticised the EU’s recently published list of high-risk third countries subject to enhanced due diligence measures in relation to anti-money laundering (AML)
The EESC says the list does not include many of the countries believed to be acting as tax havens for money laundering, and in particular, those mentioned in the Panama Papers.
The list was released in mid-July as one of two significant amendments to the fourth AML directive. It identifies those countries which it believes have deficiencies in their anti-money laundering and counter-terrorism financing regimes, and lists diligence measures that financial institutions will have to implement when dealing with financial flows from these countries.
The criticism was included in the EESC opinion on the AML, and the committee is calling for a new list of high-risk third countries be drawn up, or the scope of the measures be broadened.
During the EESC plenary on the issues earlier this week, EESC rapporteur Javier Doz Orrit proposed that ‘free trade and economic partnership agreements should include chapters to tackle money laundering, tax fraud and tax avoidance.’
The EESC also called for a centralised European register of bank accounts, more transparency on the beneficiaries of companies and trusts, tackling the anonymity of financial transactions made with prepaid cards and enhanced control through cooperation of financial intelligence units.
‘The legal treatment - definitions and penalties - of all offences relating to money laundering, tax fraud, corruption and the financing of terrorism and its connections should be harmonised at European level, as should penalties resulting from failure to comply with the AML directives,’ stated Petru Sorin Dandea, rapporteur for the session.
The committee pointed out that there are likely to be differences between the published list of high-risk countries for AML concerns, and a new list which the European Commission is in the process of developing regarding countries which are failing to meet agreed international standards to tackle tax evasion.
The common EU list of non-cooperative tax jurisdictions is scheduled to be ready in 2017. It is intended to be a ‘last resort’ option to deal with countries that refuse to respect tax good governance principles, when all other attempts to engage with these countries have failed. The single listing is designed to prevent aggressive tax planners from abusing mismatches between the different national systems, and to eliminate administrative burdens caused by divergent national approaches.
