Out-Law News 1 min. read

EU plans to tackle financial crime welcomed

News that EU law makers are moving closer to finalising new legislation aimed at tackling financial crime has been welcomed by a financial crime and investigations specialist.

Hinesh Shah of Pinsent Masons was responding to a report in the Financial Times that the Council of Ministers is shortly expected to agree its negotiating position on a new directive on asset recovery and confiscation proposed by the European Commission last year.

The EU’s other law-making institution, the European Parliament, was given its mandate to open so-called trilogue negotiations on the text last month. According to the Financial Times, the Council of Ministers’ version is expected to be approved when its Justice and Home Affairs Council meets on Thursday and Friday this week.

The plans approved by MEPs make provision for the establishment of new asset recovery offices in each EU member state and for the streamlining of processes to enable assets to be frozen and confiscated faster. The proposals under consideration by the Council of Ministers envisage giving member states powers to seize “unexplained wealth” as part of investigations  and to hold onto seized assets in some cases even if a criminal conviction has not been secured, according to the Financial Times’ report.

Shah said: “The EU's push to freeze and seize assets related to criminal activities is a significant step in combating organised crime and money laundering. By streamlining the asset seizure process and enabling states to take immediate action, the recovery of criminal profits can become more effective. With only a small fraction of criminal proceeds currently being frozen and confiscated, these new rules could significantly enhance the EU's ability to disrupt criminal networks and deprive them of their ill-gotten gains.”

“The proposed inclusion of seizing ‘unexplained wealth’ in the new EU rules demonstrates a strong commitment to tackling financial crime. By allowing member states to freeze assets even in cases where a final conviction may not be possible, the EU is sending a clear message that it will not tolerate illicit activities,” he said.

Developments with the planned new directive on asset recovery and confiscation come after MEPs recently approved other proposed EU legislation that will enable transactions incorporating cryptoassets to be traced in the same way as traditional money transfers.

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