Abstract
ABSTRACT Dirty money is often a by-product or a symptom of political corruption in the jurisdictions in which it originates. It can also spread corruption and erode democracy on its journey to its final destination. This typically involves multiple jurisdictions and is the reason why it is so hard to detect. Recently, a series of money laundering scandals have highlighted weaknesses in the anti-money laundering and counter-terrorist financing (AML/CFT) framework of the European Union (EU), the implementation of which remains the responsibility of Member States. The paper argues that EU’s defences against money laundering have been weakened partly reflecting a little-known erosion in the independence of Member State central banks, which are often the AML supervisors. It puts forward a number of new proposals to strengthen the governance and AML/CFT implementation in the EU.
Highlights
Central banks were initially set up to issue and manage the currency and to offer banking services to governments — often helping them to finance their war efforts
Prime Minister Viktor Orbán assert that the Hungarian Parliament passed ‘a mass of custom-tailored laws that mostly served as a framework for any subsequent manipulation, as well as laws that generally support the functioning of the mechanisms of state corruption’, including a law facilitating money laundering.[41]
A concrete example which indicates that large money flows from Russia may foster corruption in the legal system and may import practices of kleptocratic regimes is the criminal conviction of the former Deputy Attorney General (AG) Rikkos Erotokritou for bribery and corruption in 2017.141 Erotokritou was sentenced to three and a half years in prison for conspiring with a private law firm to prosecute five Russian natural and legal persons involved in a civil court case related to a Cyprusbased trust fund that was in a dispute with other Russians over the ownership of assets valued 250-300 million euros.[142]
Summary
Central banks were initially set up to issue and manage the currency and to offer banking services to governments — often helping them to finance their war efforts. Comes to the fight against money-laundering, central banks’ governing bodies — that are less independent than their governors — may come under political pressure to turn a blind eye to law violations Such pressure can be exerted from their respective governments, political parties or individual politicians with business ties,[14] special interest groups, such as powerful banks, law and accountancy firms that benefit from offering services to wealthy investors, etc. It explores how fragile central bank independence and related AML supervision weaknesses may compromise the goals of AML legislation and makes concrete recommendations how to remedy these deficiencies
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
