17 November 2004

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EC welcomes agreement on new measures to combat money laundering

The European Commission has welcomed the political agreement reached by the Council of Ministers for Economic and Financial Affairs on a common position on a Commission proposal for Regulation to introduce an EU-wide approach to controlling cash movements in and out of the EU.
Once adopted, the proposed Regulation would require Member States to ensure travellers entering or leaving the EU through its external borders make a declaration if they are carrying more than EUR10,000 (or its equivalent in other currencies or easily convertible assets).
The Commission in 2002 reported on a joint operation by EU customs authorities to monitor cross-border cash movements in excess of EUR10,000 from September 1999 to February 2000 that revealed total cash movements in that period of EUR1.35 billion. This large quantity of cash movements may imply money-laundering activities and a threat to Community and national interests.
Taxation and Customs Commissioner Frits Bolkestein commented, "I welcome the Council's agreement on the Commission proposal that is designed to prevent laundered money from reaching criminals and terrorists while at the same time not unduly interfering with the legitimate traveller."
The proposed Regulation would provide for a Community-wide approach to controlling cash movements into the Community. It would oblige travellers entering or leaving the Community and carrying more than EUR10,000 (or its equivalent in other currencies or easily convertible assets such as cheques drawn on a third party and traveller’s cheques/postal cheques) to make a declaration to the customs authorities.
The EUR10,000 threshold is high enough to save the majority of travellers and traders from disproportionate administrative formalities.
Customs authorities would be empowered under the Regulation to undertake controls on people and their baggage and detain cash that has not been declared.
Member States would be required to initiate proceedings, in accordance with national legislation, against people who fail to declare cash over EUR10,000. Member States would have to ensure that the penalties resulting from such proceedings were proportionate to the offence, so as to have a deterrent effect.
Where there was evidence that cash was being carried for the purpose of money laundering, Member States would be obliged to notify the competent authorities of the Member State where the person resides and of the Member State(s) through which the person entered or left EU territory.

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Editor: Saviour Balzan
The Malta Financial & Business Times, Newsworks Ltd, Vjal ir-Rihan, San Gwann
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