Regulating cash transfers at the EU’s external borders to prevent crime

EPA-EFE/VALDA KALNINA

Danske Bank branch in Tallinn, Estonia, August 3, 2018. A criminal investigation has been launched against Danske Bank by Estonian Prosecutor General Lavly Perling over money laundering allegations. According to reports, Danske Bank's Estonia branch is alleged to have been involved in money laundering between 2007 and 2015.

Regulating cash transfers at the EU’s external borders to prevent crime


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Over the last few years, Europe has suffered unprecedented terrorist violence that has killed hundreds of citizens, while also experiencing a rise in cross-border organised economic crime. The experience shows that one of the most complicated, and yet effective, means to counteract terrorist attacks is to actually stop the financing of these criminal activities.

Criminals exploit the different national rules governing cash transfers with the aim of moving funds across borders by making the tracking difficult which allows for easier money laundering and tax avoidance.

The proposal for a new regulation, a directly applicable and legally-binding legal act at the EU level, was proposed in December 2016 by the European Commission in the context of an Action Plan against terrorist financing.

The European Parliament has taken this initiative very seriously and I have worked very closely with my colleague in the S&D, Mady Delvaux, to deliver a legislative proposal in due time with the cooperation of our co-legislator, the European Council. We were all determined to adopt an EU-wide approach aimed at controlling cash movements both into or out of the EU. This will not only guarantee a functioning internal market but also protect the security of Union citizens and companies.

The regulation updates the previous instrument dating back to 2005, which had shown some deficiencies to tackle criminal behaviours. Its legal base relates to the functioning of the internal market (art. 114 of the Treaty), customs cooperation (article 33 of the Treaty), and provides customs agents with the tools they need to accomplish their tasks at the EU’s external borders.

The most relevant change is the tightening of controls on people entering or leaving the EU with €10,000 or more in cash or precious commodities, including as gold ore and even certain types of pre-paid cards that are not linked with an existing bank account, and which can be sent through postal parcels or in freight consignments.

The new regulation foresees that any person carrying a sum amounting to €10,000 or more must provide a declaration indicating who will receive the money, where the funds originated, and what the money will be used for. The relevant authorities would have the possibility to impound the money if it has not been declared or if suspicions criminal activity is suspected until the customs authorities are able to decide if a further investigation is needed. The authorities will be required to provide a detailed explanation as to why the funds had been seized. We also have to make sure that a sufficient, minimum sum is left for the person involved in the case to cover their needs while the investigation takes place.

The regulation does not only refer to the crucial role of the customs authorities to control cash transfers but also of the Financial Intelligent Units of the European Member States. They receive useful information from various sources and are therefore best placed to indicate whether further investigations are required. It is for this reason why the national information systems should be interconnected and the data swiftly shared between them. We would have ideally liked the European Commission to set up a European Financial Intelligence Unit at the EU level, but it seems that we will still have to wait to see that project accomplished.

It is up to the Member States to establish a round of sanctions for those that do not comply with the obligation to declare. We have introduced into the regulation the need for the punitive measures to be proportionate and effective. We have asked from the European Parliament to approach, as much as they can, that they impose sanctions on a national level that prevents criminals from forum shopping.

As a member of the European Parliament’s Civil Liberties, Justice, and Home Affairs Committee, I am especially committed to the fundamental rights of citizens and to their data protection rights. That is why I have to make sure that appropriate safeguards are included in the regulation.

Finally, it is important for the European Commission and the Member States to raise awareness among the citizens of the European Union, through adequate information campaigns, about the need to declare the sums of money that are equal to or exceed €10,000 when crossing the external EU borders, as there is not enough information that is currently available to the public.

I am convinced that the regulation that we have approved will be an extremely useful tool for public authorities to fight terrorism financing, money laundering and economic crime at the EU level.

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