Following FinCEN Leaks, Moneyval Envisions Stronger FIUs

By Gabriel Vedrenne

Moneyval, the Financial Action Task Force’s affiliate in Europe, recommended Tuesday that nations grant their financial intelligence units power to freeze suspicious transactions after a major leak revealed trillions of dollars worth of potentially illicit transfers across the globe.

In a joint statement, Moneyval chair Elzbieta Frankow-Jaskiewicz, a senior official at Poland’s FIU, and Ioannis Androulakis, president of the Conference of the Parties to the Warsaw Convention, a document ratified by dozens of European nations, called on FATF to expand its 40 recommendations to “include requirements for suspension of suspicious transactions.”

Giving FIUs authority to suspend high-risk transactions pending investigation would help address the world’s apparently subpar campaign against illicit finance that the “FinCEN Files,” a leak of more than 2,100 suspicious activity reports, or SARs, from the U.S. Treasury Department’s Financial Crimes Enforcement Network, has highlighted, the two officials said.

Moneyval will raise the issue with FATF in the coming weeks and make a formal proposal in October, Igor Nebyvaev, Moneyval’s executive secretary, told ACAMS in an email. A clear recommendation from FATF would help ensure that nations adopt common numerical thresholds and other standards for their FIUs to suspend transactions, Nebyvaev wrote.

“If a transaction is related to the layering phase of the money laundering process, FIUs would likely prefer suspending the movement of funds, given that they are likely to quickly disappear,” Nebyvaev wrote in the email. “If, by contrast, the transaction is in the integration stage, authorities may prefer to monitor [the suspect] and build up the dossier to make sure other properties … are identified before a suspension or seizure is made.”

All 37 European nations that are signatories to the Warsaw Convention have already empowered their FIUs to order financial institutions to suspend a transaction upon receipt of SAR when the risk of illicit finance is particularly high.

In the United Kingdom, for example, financial institutions can file a “defense against money laundering” request, a type of SAR in which they seek permission to proceed with a potentially illicit transaction. After receiving a DAML SAR, UKFIU has seven days to investigate the transaction and can apply to a court for more time to review it.

Poland’s FIU used the power 15 times in 2018 to hold transactions worth a combined €27 million, and Sweden’s FIU did so 96 times to freeze €3.5 million in total. Latvian authorities froze €45.6 million during the same period, Moneyval reported in October 2019.

But the practice has not gained broad acceptance outside of Europe’s borders, and inside them varies greatly from one jurisdiction to the next.

Several European FIUs can only request that a financial institution freeze a suspicious transaction, and the duration of the suspension also varies from a maximum of five days in Italy, to 10 days in France and 30 days in Cyprus.

Moneyval’s plan to push for FATF to recommend that all FIUs obtain freezing powers comes two days after BuzzFeed News and the International Consortium of Investigative Journalists published their first round of stories on leaked SARs that flagged more than $2 trillion in payments over a nearly 20-year period.

Graham Barrow, a London-based AML investigator and consultant who helped journalists analyze the FinCEN data, told that accompanying a SAR filing with a “mandatory freeze period” could drastically reduce defensive reporting by banks.

“Currently the bank gets all the benefit and the FIU gets all the work, but taking the freeze period into account would make the banks think a little more carefully,” Barrow said. “On the other hand, you have to be really careful how you approach that, you don’t want to see a suppression of possibly useful SARs.”

Granting FIUs such an authority may require substantial investment to implement in light of the fact that many already lack the staff and infrastructure to handle their current responsibilities.

FATF did not respond to a request for comment by press time.

Koos Couvee contributed to this story. Contact Gabriel Vedrenne at and Koos Couvee at

Topics : Anti-money laundering , Counterterrorist Financing
Source: Moneyval
Document Date: September 22, 2020