The Robustness of EU Financial Crimes Legislation: A Critical Review of the EU and UK Anti-Fraud and Money Laundering Scheme

Abstract

In this paper we set out to chart the European Union’s (EU) genesis of fighting crime as partly one of establishing the EU as an “Area of Freedom, Security and Justice” (AFSJ) and partly one of facilitating the EU internal market creation and the establishment of a global market place. We provide an overview of the current complexities facing the EU in its current struggles for a reformation and against statist approaches by focusing on the law on financial crimes and its contemporary challanges. When viewed in an historical perspective the EU’s tactic in the fight against financial crimes appears to depart from the classic internal market-based formula of the removal of obstacles for market creation and thereby ventures into the EU criminal law domain with all of its inherent complexities, without an adequately matured legal framework to endorse its policies from within. Second, to the extent that the EU adopts the market theory template in the EU policy area of ‘Freedom, Security and Justice’, there are global elements to the EU’s sanction policies. These features confirm a hybridity in which legal sources are interacting within the AFSJ field. We aim to critically assess the current state of play of the regulation of financial crimes in the contemporary EU. Furthermore, the paper focuses on recent developments in the area of financial crimes by looking at the framework for EU anti-fraud legislation: OLAF, the proposed EU Public prosecutor, the function of Eurojust and the proposed Directive of the European Parliament and of the Council on the fight against fraud to the Union's financial interests by means of criminal law. Specifically, we discuss the way the Fourth Anti-Money Laundering Directive came about and if, as claimed by the EU itself, it equips the EU with the right legal toolkit for fighting money laundering and terror financing. We also set out to scrutinize the constitutional implications of an increased powers vested in the EU Agencies in this area as powerful players for EU enforcement and we discuss the question of accountability as well as the problem of a human rights deficit in this area. We end however on a happier note by looking at the judiciaries concern to maintain individual data protection and the EU Court of Justice as a guarantee of proportionality and reasonableness in European legislative action.