In January 2020, I warned that any country that fails to keep its money laundering defences up to date risks being flooded with ill-gotten gains. My concern was that Ireland would delay implementing the 5th money laundering directive (MLD5), as it has MLD4, because this can also affect people's choice of home base and target markets for their EEA businesses. But I wouldn't want you to think Ireland was alone. In fact, the European Commission has just announced action against another 9 member states for failures relating to MLD4, bringing the total to 12 of the 28 member states. The reasons are mostly summarised below. Presumably we'll soon learn who's in the frame for failing to implement MLD5 by 10 January 2020... Makes you wonder why they pass the directives in the first place!
The Commission's first step in the infringement procedure is to put countries on notice for failing to implement a directive fully or correctly (or at all). If not satisfied with their response, the Commission then issues a 'reasoned opinion' setting out the basis for taking the country to the European Court of Justice. Then it sues them.
To put this in context, all member states failed to meet the MLD4 implementation deadline of 26 June 2017. They were all put on notice, but 'only' 12 of the EU 27 remain on the naughty step.
In July 2018, the Commission referred Greece and Romania to the ECJ for pretty much failing to implement MLD4 at all, and Ireland for only implementing "a very limited part of the rules". Those proceedings are waiting on a hearing.
Cases recently filed with the ECJ concern incomplete transposition of MLD4 in betting and gambling legislation (Austria), missing mechanisms for Financial Intelligence Units to exchange documents and information (Belgium), and failing to require information on the beneficial ownership of corporate and other legal entities (Netherlands).
The Commission has sent 'reasoned opinions' to the Czechs, Danes and Italians for failing to fully implement MLD4 into national law, without saying exactly how.
The initial step of issuing formal notice has been taken against Luxembourg (exchange of information among Financial Intelligence Units), Slovakia (the protection of whistleblowers), and Slovenia (need to adopt measures preventing convicted people from holding management functions).
It's hard to see why EU member states agree to these directives in the first place if they aren't going to implement their own red tape.
"...12 of the EU 27 remain on the naughty step."