Local view for "http://purl.org/linkedpolitics/eu/plenary/2005-05-25-Speech-3-141"
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"en.20050525.16.3-141"2
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".
Mr President, ladies and gentlemen, the European Union first adopted regulations aimed at combating money laundering in 1991. These prohibited the laundering of money from drug trafficking, and obligations were imposed primarily on financial service providers, or in other words on banks. In 2001, the scope of the Money Laundering Directive was expanded to cover a much broader range of offences. Most importantly, its obligations were extended to cover a much larger number of professions, in particular lawyers and notaries. This gave rise to considerable controversy at the time, and rightly so, because it raised questions such as whether lawyers would have to disclose confidential information they had learnt from their clients. A compromise was reached at the time, which remains in force today.
The EU’s rules are based on recommendations from the ominous
sounding FATF – the Financial Action Task Force on Money Laundering – which is a G7 body. These recommendations set out harmonised rules on combating money laundering, and are especially useful in that they are also applied in other countries outside the EU. It is, therefore, only sensible for us to incorporate these rules into our legislation.
The task now before us is to amend the money laundering regulations for the third time. There are three reasons for this; firstly, the FATF – to which I have already referred – altered its recommendations in the summer of 2003, and these changes must now be transposed into law. Secondly, the Commission had in any case been asked to provide a definition of the term ‘serious offence’, which it had failed to do last time. The third reason, and perhaps the most important, is that the Directive will now also prohibit the financing of terrorism. No one would dispute the need for this instrument in the fight against terrorism.
We agreed to adopt this Directive in a single reading. Of course, this meant that intense and complex negotiations were necessary in order to accommodate the interests not only of Parliament, but also of the Commission and the Council before today’s deadline. I am glad to say that we achieved this goal, but we were forced to make compromises in order to do so. What I am presenting to the House does not therefore correspond entirely to my own ideas, but unfortunately that is the nature of compromise. Parliament was prepared to play its part to ensure that the Directive could be adopted as speedily as possible, so that instruments for combating money laundering and terrorism could be made available without delay.
Turning to the issue of impact assessment, there can be no disputing the fact that we must do something to stop money laundering and the financing of terrorism. I should like to point out, however, that we have been presented with this Directive before we have had a chance to assess properly how effective the Second Directive has been. It goes without saying that the new Directive will mean more bureaucracy and extra costs for financial service providers, lawyers and tax consultants, and in this day and age we must make quite sure that the demands we make of those concerned bear a reasonable relationship to the benefit we expect to derive. It has not yet been possible to verify whether this is the case, and the conclusion I would draw from this is that no further amendments should be tabled before this House for the foreseeable future, or until the issue of whether our endeavours in this field serve any real purpose has been settled.
A number of improvements have been made to the Directive, and these include the incorporation of a risk
based approach, which will make it possible to refrain from further measures if the latter are not mandatory from the outset. This approach is now enshrined in the Directive.
I should briefly like to touch upon three points of contention. As a general rule, the Directive requires clients, for example of a bank, to be identified. It further stipulates that a bank must inform the authorities if it suspects that money laundering is taking place. It follows from this that the beneficial owners of legal entities must also be identified, and the question arises, with regard to public limited companies for example, of the number of shares that must be held in order to be regarded as a beneficial owner. We agreed on a compromise of 25%. As was to be expected, problems relating to politically exposed persons, or PEPs, caused somewhat of a stir in the House. I would note, however, that this Directive is not in actual fact aimed at MEPs, but at persons who are guilty of money laundering or similar offences, and we were forced to find a way of making this rule workable. We therefore came to a compromise whereby the residents of a Member State will be exempt from special surveillance measures, but that the latter will apply to residents of other Member States. It is open to debate as to whether this is a good idea, but that was the compromise that was reached.
As a final point, I have every sympathy for the attempts that lawyers naturally made to gain exemption from this Directive, particularly in view of the fact that it was only when the latter was amended for the second time that they were included in its scope. I myself would have been prepared to make the relevant changes, but I must admit that my pleas to both the Commission and the Council in this regard fell on deaf ears, and so the rules in question have essentially stayed the same. At least some progress has been made, however, in that it has now been made clear that lawyers do not have to disclose information to which they become privy during confidential legal consultations or legal representation.
I should like to thank Mr Peillon and Mr Muscat, as well as Baroness Ludford, for their cooperation, which made it possible for us to conclude the matter at first reading. I would ask Members to vote in favour of this draft report tomorrow."@en1
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