Wim Mijs, Chief Executive Officer EBF: “Only a European approach to money-laundering can turn the tide”

The current approach to financial crime leaves criminal networks too much leeway to operate. Only a European approach to money laundering can make the tide turn. An interview with Wim Mijs, Chief Executive Officer of the European Banking Federation, about the urgency of addressing the regulatory fragmentation and improving data-sharing.

In its report of March 10th, Lifting the spell of dirty money, the EBF presented a plan in which it advocates a European strategy to combat money laundering. Why is this important?

“It is the only way to fight criminal networks. We are dealing with criminals which are undermining our society. We are talking about murderous, ruthless killers: people without any moral conscience and without any consideration for human lives. After the horrible murder on Dutch lawyer Wiersma who represented a key witness in a criminal case, everyone in the Netherlands was suddenly aware of threat of Dutch organised crime. We cannot allow this to happen. A European approach is essential in this respect.”
(see ebf.eu)

Wim Mijs

What is missing in the current approach?

“To put it in two words: fragmentation and data-sharing. Looking at the money laundering scandals that took place in Latvia and Denmark last year, we see that criminals know exactly how to make use of the fragmented regulation across Europe.”

Is that also the reason why the EBF wants to lose the (by now 6th) anti-money laundering directive and is advocating for a regulation instead?

“Exactly. Directives allow member states discretion in the interpretation and implementation of EU rules in their national legal systems. As a consequence, bank branches located in different countries are dealing in their own national way with the reporting obligations and the research on money laundering patterns. Laundromats make use of the fragmentation of rules by setting up private companies in various countries and create fake orders and payments. A European regulation, which is directly applicable in all member states, would create more ground to stand on in fighting criminal networks.”

The EBF is pleading for a European supervisor with an EU-wide Financial Intelligence Unit. Who should bear the responsibility for this?

“Money laundering supervision necessitates that one authority is bringing the puzzle together by using all the puzzle pieces from the member states. How this will be organised is less important to me, as long as the supervisory and detection authorities work together and are given the right mandate and governance. Preferably, I would like to see the creation of a new agency. However, there are other options too: the European Banking Authority (EBA) could be given the role, or Europol’s mandate could be strengthened.

Feeling a shared sense of urgency to tackle disruptive criminal networks is important. The regulations should be in place, the AML rules should be interpreted the same everywhere, sufficient detection capacities should be available, bank’s compliance departments should be reported back to, public and private should cooperate and there should be a place in Europe where data can be shared.”

What does the EBF expect in this approach from the banks?

“Banks’ compliance departments prefer to be on the safe side, therefore they report a large number of cases. This creates large haystacks, where no one can find the needle We should help banks by giving more feedback, so that they have more accurate information about the real criminals. For this, we need one single party which can combine all the data. I think the Transaction Monitoring Netherlands (TMNL) approach achieves exactly this. The Dutch Ministry of Finance, the Ministry of Justice, the Dutch Central Bank (DNB) and the individual banks work together in this. That is the important thing.”

Do you think the Dutch transaction monitoring cooperation is a good example of public-private cooperation that the EBF report is asking for on European level?

“Definitely. Europe is really interested in this. We realise that this fight cannot be won alone, nor by the public sector, nor by the private sector. That is the strength of the TMNL. Once we succeed in making it work legally and bringing it in alignment with privacy rules, we are on the right path.”

At the end of 2019, the President of the Dutch Banking Association, Chris Buijnk, mentioned that the fight against financial crime requires a strong European answer. You must agree with this, don’t you?

“Absolutely, I agree a hundred percent. It is partly the reason for writing the EBF report. The recommendations of the report offer a strong European answer. Even if the Netherlands would have a perfect method for tackling financial crime, it would not be sufficient. Criminals would find a way to work around it.”

What is, in your view, the influence of the corona crisis on the fight against criminal money?

“Criminals always manage to find their way once the society is hit by an economic or social shock. Due to the size of the current crisis, we are currently risking that topic disappears of the radar. I hope this will not happen. It is essential that we continue disrupting ruthless criminal networks.”

The print version of the BW magazine (in Dutch), to be published this spring, will contain a more extensive interview with Wim Mijs.