Put an end to suspicion

by | 10 Jan 2019 | Sustainable Finance

“Borgen”, followed in its French translation by “a woman of power”, is the name of a cult Danish TV series of the early 2010s: it tells the exercise of power by a centrist Prime minister, Birgitte Nyborg, whose has often been said that the character was inspired by the inflexible European Commissioner for Competition, Margrethe Vestager.

“Borgen”, followed by “Thomas”, is the name of the Director General of Danske Bank, who resigned on September 19, following the extent of the scandal of money laundering hitting his bank, by far the largest in a country, Denmark, yet known for its low level of corruption and high transparency.

Between 2007 and 2015, about 200 billion euros passed through the Danske Bank subsidiary in Estonia via the accounts of 15,000 non-residents from the countries of the former USSR for the most part.

Mandated by the bank to investigate these movements, the firm Bruun & Hjejle, assisted by former Danish intelligence employees, analyzed 12,000 documents, 8 million e-mails, and the profile of 6,200 customers presenting significant risks. His audit concluded that the “vast majority of clients” were “suspicious” even though the report failed to accurately assess the amount of suspicious sums.

If it is emblematic, the example is not unique : in 2018 alone, a dozen European banks were sanctioned for inadequacies, sometimes very serious in this area.

Europe’s usual scapegoats will find it an opportunity to vindicate the European banking system … even though it provides 75% of the financing needs of the EU economy. Others, or the same, with a measure corresponding to their usual postures, will blame a Europe powerless to regulate and monitor its banking system.

Europe, however, is the appropriate level to fight against this scourge of money laundering.

The fifth version of the “Anti Money Laundering” (AML) directive came into force last July. It aims to strengthen the mechanisms for combating tax fraud and the financing of terrorism.

But the text remains – it was until then the preference of the Council of the European Union, which represents the Member States – a directive, with the bias that can cause differentiated, and sometimes late, national transpositions.

Above all, as proposed by Jean-Claude Juncker in his “Annual State of the Union address” last September, Europe now needs to have a single oversight, with real powers of sanction in the anti-money laundering. Failing that, and it is I who adds it, it will leave this role to national authorities often poorly equipped and sometimes too little looking … or even to  American justice.

It is in this spirit that the Commission then made targeted proposals, supposed to feed the ongoing discussions on the proposal for the revision of the Regulations establishing the European Supervisory Authorities, a proposal that the Commission had adopted in September 2017. They are aimed at ” concentrating within the European Banking Authority (EBA) anti-money laundering competencies in relation to the financial sector and strengthening accordingly the mandate of the European Banking Agency, so as to ensure effective and consistent supervision risks of money laundering by all competent authorities, as well as cooperation and information-sharing between them “.

These texts are currently being examined by the “co-legislators” (Council of the Union representing the States, Parliament representing the citizens). A vote is planned in ECON Commission today, January 10.

It is a very important question of sovereignty, except if we prefer to leave this role to American authorities, willingly extraterritorial.

This subject will remain one of the stakes of the next ECON commission, under the condition to send to the next Parliament qualified personalities, and not only people who lost national elections.

Iconography: the Danske Bank lobby, in Copenhagen, Denmark © Danske website