Money laundering solution overdue

The problem of money laundering emerges occasionally in public discourse. Only on these occasions, unfortunately, does the Greek state pay attention and start talking about solving the problem. Considering the draft law promoted on amending the existing legal framework on this issue, the picture is immediately clear, given the issue’s direct link with the transparency, free competition and internal security of the country. Legitimizing revenues from criminal activity constitutes a crime in itself, after the (belated) incorporation in 1995 of the relevant EU directive, which was criticized both for its legalistic character and for the function of the committee created by the law’s Article 7. The inability of this committee to meet the requirements of a national Financial Intelligence Unit (FIU) stems from its composition and the lack of infrastructure as well as its inability to process and analyze data immediately, coordinate strategic operations and monitor the system. According to international standards, FIU is not just a committee for collecting reports and information but a final recipient and enforcer of the law, coordinating issues that directly or indirectly refer to money laundering. It is a national instrument for turning financial information into a strategic weapon against risks to national security and the economy. Delay The 1995 law not enforced because of government inaction. After a four-year delay on incorporating the second directive on money laundering in 2001, press reports on May 26 said a bill by the Economy and Justice ministers was helping Greece uncover «the atrocious crime of money laundering.» So while this «magical» bill is being prepared – probably drafted by the very people who are responsible for the four-year delay in incorporating the second directive – just ten days later, on June 7, the Economy and Finance Ministers Council of the EU (ECOFIN) adopted the third directive which replaced the second one. It even includes stricter clauses as well as the nine recommendations of the OECD’s Financial Action Task Force (FATF) regarding terrorism funding. Notably, throughout the two years of consultation in community bodies, no one in Greece cared about the recently adopted directive. The money laundering legislation is being discussed offhandedly because the government has given no information to the professionals who are the bill’s interested parties. Having missed the chance to intervene during the drafting process of the third directive on EU level, they are protesting against the incorporation of the (already) replaced second directive. We must all realize that any «positive» legislative measures may prove destructive if we have not foreseen in time the methodology, the cost of application and the possible side effects of their distorted or occasional application. The bill promoted can create uncontrollable problems for its unsuspecting recipients – without actually bringing the essential institutional conditions of an efficient policy incorporating an already-replaced directive. I hope all this is taken into account ahead of the bill’s discussion. Combatting the legalization of revenues from criminal activity could become a strategic tool for the Greek government under some conditions. Greece’s yearlong lack of such initiatives in the Balkans means it has gradually been replaced by other regional forces. The country’s loss because of this deprivation of international presence and precious experience in this area is incalculable. (1) Dr Stavros A. Katsios is assistant professor of International Financial Relations and International Financial Crime at the Ionian University. (E-mail: [email protected], URL:

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