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The Many Uses of Anti-Money Laundering Regulation—Over Time and into the Future

Published online by Cambridge University Press:  06 March 2019


Maria Bergström
Affiliation:
European Law, Faculty of Law, Uppsala University


Abstract

Given the fast development of the field of AML Regulation, this Article aims to answer the following questions: First, how is money laundering dealt with and regulated on the EU level? Second, to which legal concerns do the chosen regulatory strategy give rise? Accordingly, this Article provides an overview of the various regulatory strategies in the global and EU regional AML Regime while at the same time points out some of the most pressing legal concerns in AML Regulation. These include the blurred line between administrative and criminal law measures and the protection of individual rights and fundamental freedoms including data protection and privacy issues in administrative and criminal law contexts respectively. Although briefly mentioning the global and international context, the focus of this Article is the EU regulatory action, its outcome and critique, and possible future.


Type
Articles
Copyright
Copyright © 2018 by German Law Journal GbR 

References

1 FATF is an inter-governmental body that was established in 1989 by the Ministers of its member jurisdictions FATF home page at http://www.fatf-gafi.org/about/ (last visited Mar. 6, 2018).Google Scholar

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6 This Article builds upon and develops from my previous publications. See generally Bergström 2011, supra note 2; Bergström, Maria, The Place of Sanctions in the EU System for Combating the Financing of Terrorism, in EU Sanctions: Law and Policy Issues Concerning Restrictive Measures (Lain Cameron ed., 2013); Bergström, Maria, Money Laundering, in Research Handbook on EU Criminal Law (Valsamis Mitsilegas, Maria Bergström & Theodore Konstadinides, eds., 2016) [hereinafter Bergström 2016]; Bergström, Maria, The Global AML Regime and the EU AML Directives – Prevention and Control, in The Handbook of Criminal and Terrorism Financing Law (Colin King, Clive Walker & Jimmy Gurule eds., 2018) [hereinafter Bergström 2018a]; Bergström, Maria, Legal Perspectives on Money Laundering, in Research Handbook on Transnational Crime (Valsamis Mitsilegas & Saskia Hufnagel eds., Edward Elgar, forthcoming in 2018) [hereinafter Bergström 2018b].Google Scholar

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28 Fourth AML Directive, supra note 5, art. 1(3) (not changed by the fifth AML Directive).Google Scholar

29 Supra note 5, art. 1(2) (not changed by the fifth AML Directive).Google Scholar

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57 Id., n.18.Google Scholar

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60 FATF, FATF 40 Recommendations (Oct. 2004).Google Scholar

61 Id., Special Recommendation II.Google Scholar

62 Id., Special Recommendation III.Google Scholar

63 Id., Special Recommendation IV.Google Scholar

64 Id., Special Recommendations V–VIII (Recommendation VI has been covered by Directive 2007/64/EC of the European Parliament and of the Council of 13 November 2007 on Payment Services (PSD) in the Internal Market, 2007 O.J. (L 319) 1, and Recommendation VII was addressed by Regulation (EC) 1781/2006 of the European Parliament and of the Council of 15 November 2006 on Information on the Payer Accompanying Transfers of Funds, 2006 O.J. (L 345) 1.).Google Scholar

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66 See generally Michael Power, The Risk Management of Everything (2004); Michael Power, Organized Uncertainty (Oxford Univ. Press, 2007) (explaining that risk management is expanding in both range and scope across organizations in the public and the private sectors and has become something of a contemporary standard for dealing with uncertainty in an organized manner). For an integrated analysis of the concepts of risk and securitization, see generally Bergström, Maria, Mörth, Ulrika & Helgesson, Karin Svedberg, A New Role for For-Profit Actors? The Case of Anti-Money Laundering and Risk Management, 5 J. Commons Mkt. Stud. 1043 (2011) (showing between the concepts of risk and securitization, both emphasizing the structural threats and uncertainties in the case of AML); see also Valsamis Mitsilegas, Money Laundering Counter-Measures in the European Union 3 (2003) (discussing “reconceptualizing security in the risk society”).Google Scholar

67 See generally Herlin-Karnell, Ester, The EU's Anti Money Laundering Agenda: Built on Risks?, in Crime within the Area of Freedom, Security and Justice, supra note 2 (a critical analysis of the risk-based approach).Google Scholar

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71 International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation: The FATF Recommendations (2012, most recently updated Feb. 2018), http://www.fatf-gafi.org/publications/fatfrecommendations/documents/fatf-recommendations.html.Google Scholar

72 Fourth AML Directive, supra note 5, art. 1(1).Google Scholar

73 See, e.g., Herlin-Karnell, supra note 67; Bergström, supra note 2; Bergström, 2016, supra note 6, n. 27.Google Scholar

74 Fourth AML Directive, supra note 5. Recital 23, for example, states that underpinning the risk-based approach is the need for member states and the Union to identify, understand, and mitigate the risks of money laundering and terrorist financing that they face. The importance of a supranational approach to risk identification has been recognized at the international level, and the European Supervisory Authority (European Banking Authority) (EBA), established by Regulation (EU) 1093/2010 of the European Parliament and of the Council, the European Supervisory Authority (European Insurance and Occupational Pensions Authority) (EIOPA), established by Regulation (EU) 1094/2010 of the European Parliament and of the Council, and the European Supervisory Authority (European Securities and Markets Authority) (ESMA), established by Regulation (EU) 1095/2010 of the European Parliament and of the Council, should be tasked with issuing an opinion, through their Joint Committee, on the risks affecting the Union's financial sector. Recital 24 of the Fourth AML Directive then states that national and Union data protection supervisory authorities should be involved only if the assessment of the risk of money laundering and terrorist financing has an impact on the privacy and data protection of individuals.Google Scholar

75 See European Commission, Report on the Application of the Third Anti-Money Laundering Directive: Frequently Asked Questions, MEMO/12/246 (Apr. 11, 2012), http://europa.eu/rapid/press-release_MEMO-12-246_en.htm?locale=en (last visited Mar. 15, 2018) (explaining the review of the third AML Directive undertaken by the Commission, with a view to addressing any identified shortcomings).Google Scholar

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88 See also Council Decision 2000/642/JHA of 17 October 2000 Concerning Arrangements for Cooperation Between FIUs of the Member States in Respect of Exchanging Information, 2000 O.J. (L 271) 4 (the Commission also plans to update); European Commission, Report on the Application of the Third Anti-Money Laundering Directive: Frequently Asked Questions, MEMO/12/246 (Apr. 11, 2012) http://europa.eu/rapid/press-release_MEMO-12-246_en.htm?locale=en.Google Scholar

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