With a New Initiative on the Horizon, the EU Steps Up the Fight Against Financial Crime
July 06, 2020 by Mark Dunn
Europol, the European Union’s law enforcement agency, recently launched the European Financial and Economic Crime Centre (EFECC). This new Centre sets out to support EU member states and their governing bodies in fighting economic and financial crime and to promote a more systematic approach to financial investigations. As collaboration on enforcement is likely to increase, the financial services industry in the EU and beyond would do well to re-evaluate their due diligence process and their operational resilience to financial and economic crime. But how will this centre operate in the future? And what should can companies expect from it?
A new impetus for the fight against financial crime
Created during a period of heightened economic and financial crime threats due to the COVID-19 pandemic, the Centre aims to strengthen the overall approach towards financial crime in the European Union and supports transnational financial crime investigations. By providing a comprehensive platform, paired with a toolbox for financial investigators across the EU, the Centre will offer operational support to national investigations and seeks to increase operational visibility throughout the EU.
In a statement published with the Centre’s launch, Margaritis Schinas, the European Commissions’ Vice-President, emphasised, “Financial and economic crime harms us all and doesn’t stop at national borders. And it’s often a key activity of organised crime groups that we can uncover if we follow the money. With our new Centre, we’ll be better equipped to fight economic crime together.”
Within its mandate, the EFECC, which will be operational at the end of 2020, will furthermore assist the newly established European Public Prosecutor Office (EPPO) in its financial and economic crime investigations and prosecutions.
The EU takes the gloves off in the fight against financial crime
The need for comprehensive and EU-wide cooperation in this field has become even more pressing since the start of the COVID-19 pandemic, which has drastically affected economies in the EU. In anticipation of an extended recovery phase for both the global and the European economy, a joint operational hub to fight financial and economic crimes now seems to be more necessary than ever.
As a part of a wider action plan of the European Commission, the establishment of the EFECC emphasises a comprehensive policy when it comes to fighting terrorist financing and money laundering. Complementing the established and recently updated EU’s AML and CTF framework, the goal is to channel their concerted efforts and to close loopholes in national and transnational law enforcement of financial and economic crimes.
EFECC – A new incentive for increased due diligence?
A new organisation within the already complicated cosmos of regulatory and executive bodies in the EU poses new challenges for entities that seek to conduct business within member states and beyond.
With the establishment of the EFECC, the EU takes another step towards a better and more robust compliance regime. Consequently, organisations must see the enhanced transnational enforcement as an incentive to strengthen their own due diligence and third-party risk monitoring processes. This way entities can not only mitigate potential financial or operational sanctions but can foster a stronger, positive public reputation. Are there gaps in your compliance process that need to be addressed?
1. Learn how to shift your due diligence process from a business burden to a business benefit.
2. Explore the key changes in the latest EU AML regulations.