The Future of Financial intelligence sharing (FFIS) international research programme submitted this consultation response to the European Commission consultation on guidance on the rules applicable to the use of public-private partnerships in the framework of preventing and fighting money laundering and terrorist financing. This was submitted with the support of fellow members of the Europe Chapter of the Global Coalition to Fight Financial Crime – Refinitiv, The Royal United Services Institute (RUSI) and The European Banking Federation.
“Traditional approaches to AML/CFT reporting in Europe (in tandem with other jurisdictions around the world) have struggled to demonstrate effective results. Financial crime scandals continue to occur and – 30 years since the current AML/CFT framework was conceived – quantitative measures of outcomes of impact against money laundering remain desperately low.
The Future of Financial Intelligence Sharing (FFIS) landmark study ‘The Role of Financial Information-Sharing Partnerships in the Disruption of Crime’ in 2017 highlighted the growing financial cost, limited evidence of effective outcomes and increasing data collection footprint on societies arising from traditional AML/CFT suspicious reporting frameworks. Reviewing insights from across the development of partnerships in key financial centres, the report explored the ‘start-up’ experiences of public-private financial information-sharing partnerships (FISPs) and lessons from those experiences.
Since 2015, the introduction of public-private FISPs has led to a significant step-change in jurisdictions that have applied them.
In 2020, a worldwide FFIS survey of over 20 FISPs, drew together quantitative indicators of impact emerging from both strategic and tactical-level partnerships. The study also highlighted how partnerships enabled resources and expertise to be directed in a more agile manner against priority threats, such as COVID-19 related economic crime. From 2017 onwards, several EU member-states have established their own FISPs and Europol has developed the world’s leading cross-border financial information-sharing partnership.
The available evidence indicates that processes of public-private and private-private AML/CFT information sharing can enable regulated entities to be more targeted, relevant, timely and impactful in their AML/CFT reporting to the public sector.
Some EU Member State activity is world-leading in this field. However – in general – the AML/CFT policy environment at the EU level does not provide a conducive environment for public-private and private-private tactical information-sharing (i.e. sharing of personal data). Relevant innovation is driven by Member States and, not yet, by the EU policy framework.
The EU has an opportunity to lead standards in this area, rather than lag.
We would recommend a greater level of ambition be achieved at the European Commission policy level to move beyond surveying existing practice in Europe and publishing best practice, but to place public-private collaboration more centrally within the European response to AML/CFT threats.”
