EU Slams Cyprus, Portugal Over AML Reform Delays

Cyprus, the Netherlands, Portugal and other countries are in trouble with the European Commission over their failure to implement new rules cracking down on money laundering, according to Reuters on Wednesday (Feb.12).

The rules were adopted by the European Union two years ago, after the 2016 terrorist attacks that killed over 130 people in Paris. Twenty-seven E.U. states were required to implement the rules, which would counter dirty money in sectors including cryptocurrency, prepaid cards and shell companies. The rules were aimed at curbing funding to terror groups.

However, eight countries haven’t yet adopted the rules as law. Those countries are Cyprus, Hungary, the Netherlands, Portugal, Romania, Slovakia, Slovenia and Spain, according to the E.U.

The Commission issued warning letters to the officials in those countries, which is the first step in a process that could end up with fines imposed if the countries do not correctly enact the rules.

The situation signals a heightened awareness and seriousness with which the E.U. is tackling money laundering, on the heels of a slew of high-profile cases that have hit major E.U. banks in the last few years.

Valdis Dombrovskis, a commissioner for money laundering and a former Latvian prime minister, has caught criticism for slowing down reforms for money laundering brought up after scandals in countries like Latvia, Denmark, Estonia, Malta, Cyprus and other E.U. states.

Cryptocurrency platforms are required to identify their users under the latest overhaul of the practices, which will have the potential effect of slowing money laundering as anonymity for those users is vanquished. The ultimate owners of trusts will be more identifiable under those rules, too.