An examination of the proposed EU AML/CFT legislative package, with particular reference to the proposals revising the supervisory framework : the potential impact on Maltese supervisory bodies, banks and financial institutions

Abstract

In the past 30 years, the European Union has displayed a persistent effort to eliminate money laundering and the financing of terrorism through the creation and adaption of the EU AML/CFT Directive. Nevertheless, the fact that money laundering and terrorist financing remain of utmost concern to the European community draws into question the effectiveness of the present legislative regime. Numerous concerns have been voiced by prominent persons and bodies, highlighting the multiple shortcomings of the framework. Additionally, in light of the various banking scandals, where large amounts of illegitimately obtained funds entered the European system through reputable and regulated financial institutions, the need to react to money laundering in a more aggressive manner was felt by the Commission. In this regard, the EU AML/CFT legislative package was proposed in 2021 in a clear effort to combat money laundering and terrorist financing once and for all. The ambitious package is composed of a Regulation establishing a new EU AML Authority, a Regulation on AML/CFT, the 6th Directive on AML/CFT and a Revision of the 2015 Regulation on Transfers of Funds. This undergraduate dissertation shall explore the provisions of the legislative package pertaining to the supervisory framework within the European Union, in order to determine the impact on Maltese supervisory bodies, banks and financial institutions. Given that money laundering is a serious crime, it should be met with the appropriate and proportionate response. Throughout this study, it shall be determined whether the proposed changes to the supervisory framework will eliminate the weaknesses of the current regime, as well as whether the package is a suitable response to the ML/FT risks faced by the Union.