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Commission steps up fight against money laundering and terrorist financing

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The European Commission has today put forward a comprehensive approach to further strengthen the EU’s fight against money laundering and terrorist financing.

The Commission has published an ambitious and multifaceted Action Plan, which sets out concrete measures that the Commission will take over the next 12 months to better enforce, supervise and coordinate the EU’s rules on combating money laundering and terrorist financing. The aim of this new, comprehensive approach is to shut down any remaining loopholes and remove any weak links in the EU’s rules.

Executive Vice-President Valdis Dombrovskis said: “We need to put an end to dirty money infiltrating our financial system. Today we are further bolstering our defences to fight money laundering and terrorist financing, with a comprehensive and far-reaching Action Plan. There should be no weak links in our rules and their implementation. We are committed to delivering on all these actions – swiftly and consistently – over the next 12 months. We are also strengthening the EU’s global role in terms of shaping international standards on fighting money laundering and terrorism financing.”

The Commission has also published today a more transparent, refined methodology to identify high-risk third countries that have strategic deficiencies in their anti-money laundering and countering terrorist financing regimes that pose significant threats to the EU’s financial system. This will enhance our engagement with third countries and ensure greater cooperation with the Financial Action Task Force (FATF).

Finally, the Commission has also adopted a new list of third countries with strategic deficiencies in their anti-money laundering and counter-terrorist financing frameworks.

Action Plan for a Comprehensive EU policy on Preventing Money Laundering and Terrorist Financing

Today’s Action Plan is built on six pillars, each of which is aimed at improving the EU’s overall fight against money laundering and terrorist financing, as well as strengthening the EU’s global role in this area. When combined, these six pillars will ensure that EU rules are more harmonised and therefore more effective. The rules will be better supervised and there will be better coordination between Member State authorities.

The six pillars are as follows:

Effective application of EU rules: the Commission will continue to monitor closely the implementation of EU rules by Member States to ensure that national rules are in line with the highest possible standards. In parallel, today’s Action Plan encourages the European Banking Authority (EBA) to make full use of its new powers to tackle money laundering and terrorist financing.

A single EU rulebook: while current EU rules are far-reaching and effective, Member States tend to apply them in a wide variety of different manners. Diverging interpretations of the rules therefore lead to loopholes in our system, which can be exploited by criminals. To combat this, the Commission will propose a more harmonised set of rules in the first quarter of 2021.

EU-level supervision: currently it is up to each Member State to individually supervise EU rules in this area and as a result, gaps can develop in how the rules are supervised. In the first quarter of 2021, the Commission will propose to set up an EU-level supervisor.

A coordination and support mechanism for Member State Financial Intelligence Units: Financial Intelligence Units in Member States play a critical role in identifying transactions and activities that could be linked to criminal activities. In the first quarter of 2021, the Commission will propose to establish an EU mechanism to help further coordinate and support the work of these bodies.

Enforcing EU-level criminal law provisions and information exchange: Judicial and police cooperation, on the basis of EU instruments and institutional arrangements, is essential to ensure the proper exchange of information.The private sector can also play a role in fighting money laundering and terrorist financing. The Commission will issue guidance on the role of public-private partnerships to clarify and enhance data sharing.

The EU’s global role: the EU is actively involved within the Financial Action Task Force and on the world stage in shaping international standards in the fight against money laundering and terrorist financing. We are determined to step up our efforts so that we are a single global actor in this area. In particular, the EU will need to adjust its approach to third countries with deficiencies in their regime regarding anti-money laundering and countering terrorist financing that put our Single Market at risk. The new methodology issued alongside this Action Plan today provides the EU with the necessary tools to do so. Pending the application of the revised methodology, today’s updated EU list ensures better alignment with the latest FATF (Financial Action Task Force) list.

To ensure inclusive discussions on the development of these policies, the Commission launched a public consultation today on the Action Plan. Authorities, stakeholders and citizens will have until 29 July to provide their feedback.

Refined methodology

The Commission has today published a new methodology to identify high-risk third countries that have strategic deficiencies in their national anti-money laundering and countering terrorist financing regimes, which pose significant threats to the EU’s financial system. The aim of this new methodology is to provide more clarity and transparency in the process of identifying these third countries. The key new elements concern: (i) the interaction between the EU and FATF listing process; (ii) an enhanced engagement with third countries; and (iii) reinforced consultation of Member States experts.The European Parliament and the Council will have access to all relevant information at the different stages of the procedures, subject to appropriate handling requirements.

Updated List

Under the Anti-Money Laundering Directive (AMLD), the Commission has a legal obligation to identify high-risk third countries with strategic deficiencies in their regime regarding anti-money laundering and countering terrorist financing. Pending the application of the above-mentioned refined methodology, the Commission has today revised its list, taking into account developments at international level since 2018. The new list is now better aligned with the lists published by the FATF.

Countries which have been listed: The Bahamas, Barbados, Botswana, Cambodia, Ghana, Jamaica, Mauritius, Mongolia, Myanmar, Nicaragua, Panama and Zimbabwe.

Countries which have been delisted: Bosnia-Herzegovina, Ethiopia, Guyana, Lao People’s Democratic Republic, Sri Lanka and Tunisia.

The Commission amended the list in the form of a Delegated Regulation. It will now be submitted to the European Parliament and Council for approval within one month (with a possible one-month extension).Given the Coronavirus crisis, the date of application of today’s Regulation listing third countries – and therefore applying new protective measures – only applies as of 1 October 2020. This is to ensure that all stakeholders have time to prepare appropriately. The delisting of countries, however, is not affected by this and will enter into force 20 days after publication in the Official Journal.

Background

The Commission’s Anti-Money Laundering Package of July 2019 highlighted a number of weaknesses in the EU’s anti-money laundering / countering the financing of terrorism framework. While the transposition and entry into force of recent legislation will address some of these issues, other problems remain. In response to this package, the European Parliament and the Council invited the Commission to investigate what steps could be taken to achieve a more harmonised set of rules, better supervision, including at EU level, as well as improved coordination among Financial Intelligence Units. Today’s Action Plan is the Commission’s reply to this call for action, and the first step to achieve the Commission’s priority to deliver a new, comprehensive framework to fight money laundering and terrorist financing. The new methodology to identify and mitigate threats that strategic deficiencies in the anti-money laundering and countering terrorist financing of third countries pose to the integrity of the EU’s financial system, also issued today, will further equip the EU to deal with external risks.

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EU Politics

Conditions worsen for stranded migrants along Belarus-EU border

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At least eight people have died along the border between Belarus and the European Union, where multiple groups of asylum-seekers, refugees and migrants have been stranded for weeks in increasingly dire conditions. 

The UN Refugee Agency, UNHCRappealed for urgent action on Friday, to save lives and prevent further suffering at the border with Latvia, Lithuania, and Poland. The latest casualty was reported within the past few days. 

UNHCR warned that the situation will further and rapidly deteriorate as winter approaches, putting more lives in danger. 

For the Agency’s Regional Director for Europe, Pascale Moreau, “when fundamental human rights are not protected, lives are at stake.” 

“It is unacceptable that people have died, and the lives of others are precariously hanging in the balance. They are held hostage by a political stalemate which needs to be solved now,” he said. 

According to media reports, the EU regards the increase in asylum seekers at the border, a direct result of Belarus, in effect, weaponizing migrants, in retaliation for sanctions placed on the Government over the suppression of the protest movement following last year’s disputed re-election of President Lukashenko.  

International group 

Among those stranded are 32 Afghan women, men and children. They have been left in limbo between Poland and Belarus since mid-August, unable to access asylum and any form of assistance. They do not have proper shelter and no secure source of food or water. 

A group of 16 Afghans tried to cross into Poland this week, but they were apprehended and not allowed to apply for asylum. They were also denied access to legal assistance. Within a few hours, they were pushed back across the border to Belarus. 

So far, UNHCR has not been granted access to meet with the group from the Polish side, despite repeated requests, and only met them a few times from the Belarusian side to deliver life-saving aid. 

International law 

The Agency has been advocating for the group to be granted asylum, since the Afghans have expressed their wish to settle either in Belarus or in Poland. 

The request has been ignored by both sides. For UNHCR, that is “a clear violation of international refugee law and international human rights law.” 

“We urge Belarus and Poland, as signatories to the 1951 Refugee Convention, to abide by their international legal obligations and provide access to asylum for those seeking it at their borders.  

“Pushbacks, that deny access to territory and asylum, violate human rights in breach of international law”, said Mr. Moreau. 

UNHCR urges the authorities to determine and address humanitarian and international protection needs, and find viable solutions. The agency also stands ready to support refugees, together with other relevant stakeholders. 

“People must be able to exercise their rights where they are, be it in Belarus or in Poland or other EU States where they may be located. This must include the possibility to seek asylum, access to legal aid, information and appropriate accommodation”, Mr. Moreau concluded. 

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EU Politics

Focus on the recovery from the pandemic at the 19th EU Regions Week

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The annual European Week of Regions and Cities has shown how the EU and national and regional governments can support European citizens and their local communities with public policies aimed at investing in a fairer, greener and more digital future for recovery. Under the theme ‘Together for Recovery’, more than 300 sessions, including debates with high-profile officials, regional and local representatives, an inspiring Citizens’ Dialogue, various workshops as well as an Award for outstanding young journalists, celebrated the EU values of cohesion and solidarity.

Taking place in a hybrid format, with sessions both physical and virtual, the 19th EU Regions Week had one main mission: highlighting the role of EU investments in the recovery from the pandemic and in facing common challenges. The event kicked off with a press conference with Apostolos Tzitzikostas, President of the European Committee of the Regions (CoR) and Elisa Ferreira, Commissioner for Cohesion and Reforms, who underlined that “Cohesion Policy was one of the first responders in the emergency phase of the COVID-19 pandemic, driven by the core value of EU solidarity”.

The second annual local and regional barometer was presented by Apostolos Tzitzikostas, followed by a debate with members of the European Committee of the Regions. The report confirmed that the pandemic related measures put at risk regional and local finances, resulting in a 180 billion budget cut for local and regional authorities across Europe. At the same time, 1 in 3 local and regional politicians want regions and cities to become more influential in EU policy-making on health issues.

Unless we measure the state of our regions and cities, we cannot understand the state of our Union” said Apostolos Tzitzikostas, President of the European Committee of the Regions. “Only by taking the pulse of our communities, we can decide how effective the EU has been on the ground, and what the EU needs to do to help its people”.

Further taking stock of the EU cohesion policy response to the coronavirus pandemic as well as informing the general public, various workshops touched upon life before and after the pandemic, including explanations regarding the role of regions and cities for a Green Transition, the Cohesion Policy 2021-2027 and NextGenerationEU, as well as the CRII, CRII+, React-EU support packages for regional and local healthcare services and equipment.

Young journalists were also invited to take part in the EU Regions Week 2021, getting the opportunity to debate with Elisa Ferreira at the Citizens’ Dialogue. In the Youth4Regions programme for aspiring journalists, Irene Barahona Fernandez from Spain and Jack Ryan from Ireland won the 2021 Megalizzi-Niedzielski prize for aspiring journalists.

About the event

The European Week of Regions and Cities (#EURegionsWeek) is the largest EU-wide event on regional development. It is co-organised by the European Commission and the European Committee of the Regions.

In total, more than 12 000 participants and 900 speakers joined the 4-day event either physically or online, showing engagement in all corners of EU society – from our vibrant youth to our high-profile officials, local and regional representatives, academic experts and professional specialists, displaying a common readiness to tackle what the future holds, together.

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EU Politics

EU and Qatar sign landmark aviation agreement

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The European Union and the State of Qatar today signed a comprehensive air transport agreement, upgrading rules and standards for flights between Qatar and the EU. The agreement sets a new global benchmark by committing both sides to fair competition, and by including social and environmental protection. The signing means new opportunities for consumers, airlines and airports in Qatar and the EU.

Qatar is an increasingly important aviation partner for the EU. It was the 15th largest extra-EU market in 2019 with 6.3 million passengers travelling between the EU and Qatar. Ensuring open and fair competition for air services between both is therefore crucial, also for routes between the EU and Asia.

Adina Vălean, Commissioner for mobility and transport, said: “This agreement, the first one between the EU and the Gulf region, is a global benchmark for forward-looking aviation agreements. It is testimony to our shared commitment to economically, socially and environmentally sustainable aviation, based on a modern framework covering fair competition and closer cooperation on social and environmental matters. This agreement will bring new opportunities, more choice and higher standards for passengers, industry and aviation workers.”

Today’s agreement creates a level playing field that is expected to result in new air transport opportunities and economic benefits for both sides:

  • All EU airlines will be able to operate direct flights from any airport in the EU to Qatar and vice versa for Qatari airlines.
  • EU airports in Germany, France, Italy, Belgium and the Netherlands will be subject to a gradual build-up of capacity until 2024. For more details on this, see the Q&A.
  • Strong provisions on open and fair competition will guarantee a level playing field.
  • The parties recognised the importance of social matters, agreed to cooperate on these and to improve their respective social and labour laws and policies as per their international commitments.

The agreement will facilitate people-to-people contacts and expand commercial opportunities and trade. Going beyond traffic rights, the EU-Qatar agreement will provide a single set of rules, high standards and a platform for future cooperation on a wide range of aviation issues.

Background

Qatar is a close aviation partner for the European Union; more than 6 million passengers travelled between the EU and Qatar per year under the existing 26 bilateral air transport agreements with EU Member States prior to the pandemic. While direct flights between most EU Member States and Qatar have already been liberalised by those bilateral agreements, none of them include provisions on fair competition, or social and environmental issues, which the Commission considers essential for a modern aviation agreement.

In 2016, the European Commission obtained authorisation from the Council to negotiate an EU-level aviation agreement with Qatar, which started on 4 March 2019. While the agreement still needs to be ratified by the parties before formally entering into force, it will start being applied from today’s signature.

Similar EU comprehensive air transport agreements have been signed with other partner countries, namely the United States, Canada, the Western Balkans, Morocco, Georgia, Jordan, Moldova, Israel and Ukraine. Further air transport agreements with Armenia and Tunisia are expected to be signed in the coming weeks.

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