Terrorism and Conflicting Laws

A PAPER BY LEONARDO BORLINI STUDIES CONTRASTS AMONG LAWS GOVERNING MONEY LAUNDERING AND THE EU FRAMEWORK

Terror is one of the most severe challenges facing Europe. The topic has been addressed with laws that prevent money laundering, financing of terrorism, proliferation of weapons of mass destruction. Unfortunately such laws, born out of the needs for security and the integrity of the financial sector, may conflict with European Union rules.

Leonardo Borlini began to observe the problem while working as a technical expert at the International Monetary Fund, before joining the Department of Legal Studies at Bocconi University. In Regulating Criminal Finance in the EU in the Light of the International Instruments (Yearbook of European Law, 2017) he analyzes the European legislative initiatives approved in 2015, in particular the Directive (EU) 2015/849 adopted by the EU member states, Italy included. This directive adopts the non-binding recommendations promoted by the inter-governmental body Financial Action Task Force (FATF). After a long gestation, the EU has therefore extended the previous legislation by expanding the obligations of states and individuals such as the task of monitoring customers who belong to the category of domestic politically exposed persons, their business parters and their relatives.

“The adoption of the global standards issued by FATF entails some issues”, Borlini says. “Firstly, there is no EU binding policy harmonizing the definitions of offenses and sanctions; the focus is thus shifted more to the preventive side. This may cause problems when cooperation between authorities of different countries is needed. Secondly, the adaptation of the FATF recommendations is likely to create tensions with fundamental freedoms and rights that are granted under EU law, from the right to a fair trial to the freedom to provide services”. Borlini identifies two issues of concern that are most likely to lead to appeals: the right to privacy and data protection. “These difficulties are not dealt with in the amendments to the directive that are currently under discussion”.

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by Claudio Todesco