The provision or collection of funds, by any means, directly or indirectly, with the intention that they should be used or in the knowledge that they are to be used, in full or in part, to carry ou
Money laundering is the process by which criminal proceeds are "cleaned" so that their illegal origins are hidden. It is usually associated with the types of organised crime that generate huge profits in cash, such as trafficking in drugs, weapons and human beings as well as fraud. Although it is not possible to measure money laundering in the same way as legitimate economic activity, the scale of the problem is considered to be enormous.
Since money laundering is a complex, wide-spread and multi-faceted activity, it is tackled from several different angles. The focus is, at one and the same time, on regulating financial institutions with a view to preventing money laundering and on law enforcement aspects.
The keystone of the European system remains the Third Anti-Money Laundering Directive, adopted in 2005, which requires financial operators and some non-financial operators – the so-called "gatekeepers" – to report any suspicious or unusual transactions or activities. The Directive incorporates into EU law the revised Forty Recommendations of the Financial Action Task Force (FATF), which is the international standard setter in the fight against money laundering and terrorist financing.
Financial Intelligence Units (FIUs) play a key role in the fight against money laundering and terrorist financing. These units are responsible for receiving, requesting, analysing and disseminating information to the competent authorities on potential money laundering or terrorist financing activities. They are usually placed within law enforcement agencies or administrative bodies reporting to Ministries of Finance in EU States.
A number of entities and persons fall under anti-money laundering reporting requirements, such as banks, financial institutions, notaries or casinos. They must file a suspicious transaction report without delay to the FIU when they know or suspect that money laundering or terrorist financing is being or has been committed or attempted. The reports are then transmitted to competent authorities, including law enforcement agencies and foreign FIUs. On the basis of these reports, criminal investigations might be launched if necessary.
The Commission has made significant efforts to improve coordination and cooperation between FIUs and to harmonise criminal penalties for money laundering. The operational cooperation and exchange of information among EU FIUs has been reinforced by the FIU-NET project. Funded by the Commission since its beginning, this project aims to establish a secure computer network for the exchange of financial intelligence.