The efficiency of the European Union’s Anti-money laundering legislation : An analysis of the legal basis and the harmonisation of the EU Anti-money laundering legal framework

Abstract: The purpose of this thesis is to examine the efficiency of the EU Anti-money laundering legislation in the light of a coherent and broad scope of legislative framework. To achieve this purpose, the thesis examines firstly the legal basis of an EU Anti-money laundering legislation in general. The thesis analyses whether the legal basis for an Anti-money laundering legislation should and could be based on article 83(1) of the Treaty on the Functioning of the European Union (TFEU), in which the EU now has explicit competence to legislate in the area of criminal law, or whether the legal basis should be based on article 114 TFEU, which aims to approximate the internal market. The thesis demonstrates that article 114 TFEU and article 83(1) TFEU are both used as a legal basis in different Anti-money laundering legislations across the Union. However, with respect to a more coherent and uniform legislation, article 114 TFEU would be a better alternative as a legal basis due to its broad application, both with respect to the choice of legal instruments which can be based on the provision and with respect to the approximation of the internal market. Secondly, the thesis examines the harmoniation of Member States national legislation, in light of a Minimum-directive legal instrument. As the current Anti Money Laundering Directive is based on minimum harmonisation, Member States may impose more stringent rules than those in the EU Anti-money laundering Directive. Thus, this has created divergent rules across the EU, which could increase the risk of forum shopping by criminals, in order to avoid supervision. The thesis demonstrates that the Minimum-Directive based Anti-money laundering Directive has created divergent rules across different Member States, which can have a negative impact on the society of the EU and the internal market. Thirdly, the thesis analyses, in light of the previous two examinations, the future of the Anti-money laundering legislation. It is demonstrated that an Anti-money laundering Regulation, which has been proposed by the EU Commission, could amend the issues which have been highlighted in the thesis, particularly with respect to issues relating to minimum harmonisation. However, in such a case, the legal basis could be questioned, as article 83(1) TFEU only applies to certain types of legislative instruments. Nevertheless, as the Regulation is, in this time, only a proposal, the thesis examines a similar legislative instrument, the Market Abuse Regulation, and how that Regulation has developed, in order to try to gaze into a possible future in the Anti-money laundering area.