Cause and Effect in European Politics and Law

Too High Expectations with the "Anti-Mafia" Committee in European Parliament

Zhaneta Kuyumdzhieva, Adelina Marini, May 2, 2013

The special committee for organised crime, corruption and money laundering started its meeting on April 23rd with turning the spotlight onto an isolated case. The decision of the committee's chairwoman Sonia Alfano (ALDE, Italy) to raise the issue about a signal of an assassination threat for the prosecutor of Palermo was not met with much approval. A possible reason for the refusal could be the very narrowly formulated mandate of the temporary committee, the main purpose of which is to propose community legislation for a common European fight with corruption, organised crime and money laundering in the EU. Mr Bill Newton Dunn (ALDE, UK) commented that discussing that issue was a "loss of precious time" and recalled that similar signals from other countries (including Bulgaria) were not taken into account in previous hearings. Last year, the European "anti-mafia" committee refused a hearing on the issue of the crime past of former Bulgarian Prime Minister Boyko Borisov.

The highly pragmatic approach of the members of the special committee left unpleasant impression. Some recommended European Parliament President Martin Schulz to be invited to speak on the issue, while others said it would be better to turn to the European Commission. The discussion started resembling a football game - perfect play with the ball by the defence, but it was obvious that there was no centre forward. In such a situation we cannot but ask the question since this committee is working on behalf of all member states and the national judiciaries and executives are expected to work in defence of the EU interests, how is it possible isolated cases of assassinating warnings for magistrates not to receive at least an adequate hearing?

In fact, the agenda of the meeting was very busy and the topic everyone hurried for was the interim report of Salvatore Lacolino (EPP, Italy), with which the committee recommends legislative measures to counter crime, money laundering and corruption. In a very short time, the text received almost 750 proposals for amendments. In the prelude to the hearing of the members of the committee, the rapporteur reported of 55 compromise proposals, 1/3 of which were already discussed and adopted at the last meeting of the working group.

Some of them were related to the status of Europol and should the organisation be granted additional powers. Mr Rui Tavares, deputy chairman of the special committee, was of the opinion that it was necessary to ensure parliamentary oversight over the work of Europol to guarantee democracy. His opinion joined Jan Philipp Albrecht (Greens, Germany). He focused the attention also on the need the document to be laid on a stable constitutional foundation and to take into account the specifics of the legal systems of the member states. Ms Véronique Mathieu Hоuillon (EPP, France) shared a different opinion, defending the proposal to grant more powers to the community police organisation. Her colleague Newton Dunn, for his part, recommended work toward turning Europol into a European FBI.


Regarding corruption, the committee offers a plan that affects the public and private sectors. A major priority is to create maximum transparency of all bureaucratic procedures, thus reducing the possibilities of unfair practises at all levels. In addition, also discussed was the need not to allow cases of corruption to lose legal prescription in a penal trial.

Money laundering

The members of the special committee call on banks, notaries and enterprises to unite their actions against the attempts for money laundering. The economic losses from this phenomenon are estimated to be trillions of euro - money which was deviated illegally to finance criminal acts. The trends are the range of this activity to expand further and further. If in the beginning money laundering was connected to mafia profits from drugs trade, now more and more money is laundered from tax frauds, funding terrorism and other sources.

On the topic of practises, the committee heard Brigitte Unger, a professor in the University of Utrecht, The Netherlands. According to her, the member states apply in a different way the rules for money laundering. The legislation in the individual EU member states treats in a different way tax crimes, too. In some member states, tax evasion is a violation not a crime. This, according to Professor Unger, should be changed legally, moreover given the fact that with offshore practises and new media the fight against money laundering and tax fraud will get more complicated. She concluded that a single standard cannot be applied in all member states and underscored that the contemporary trans-border aspect of organised crime requires persistent cooperation with third countries, improvement of the exchange of information among the member states and implementing best practises with the aim to prevent money laundering.

During the meeting on April 23rd, was also heard Domagoj Margetic, a controversial Croatian investigative journalist. He revealed one of the big money laundering affairs in Croatia, related to the Austrian bank Hypo Alpe Adria. According to his investigation and the presentation he presented to MEPs in Strasbourg, the Croatian government led by the defendant for numerous indictments and serving a prison sentence former Prime Minister Ivo Sanader, laundered money from smuggling through the Austrian bank. Before the MEPs, he described the ways in which high state officials, through secret accounts of individuals, invested money from the state budget in the private financial institutions. This money is from the pension fund, privatisation deals, the security and defence fund, the development fund, saving accounts of Croatian citizens in foreign currency for which the authorities in the 1990s claimed the money could not be returned in Croatia.

A source of capital for the bank were billions of Croatian kunas from state-owned enterprises transferred to secret accounts of individuals. In those operations took part various members of executive boards of local banks, directors of enterprises, chiefs of big criminal organisations, high officials from various governments. The money laundering was done by the bank through investment projects in construction, tourism, filial enterprises, long-term deposits, etc. Before becoming an investigative journalist, Domagoj Margetic tested himself in politics by establishing a party of Croatian soldiers, but never stood in elections. He actively participates in the Occupy movement which since the beginning of the year has been actively working in Croatia.

The German  perspective on the issue of money laundering was presented by Michael Dewald from the federal criminal agency. According to him, in 2011 the German services received 13 000 signals of money laundering cases. He specified that in 2012 their number increased, but that should not be viewed as a negative trend of the quantity of registered crimes like this, but rather as a consequence of better reporting by the competent authorities. A very large share of all these signals is related to the financial sector which, however, indicates that the other sectors are not aware of their responsibility on this issue.

And although the financial institutions are some of the most frequent "detectors" of crimes related to money laundering, the report identifies the bank secret as a cloak to cover illegal transactions. The committee is deliberating on a proposal the bank secret to be removed and as an alternative registers of bank accounts to be introduced. It is expected such a data base to improve the transparency of money flows.

Also interesting was the proposal by members of the committee to look for money laundering in the area of public procurement. The recommendation here is to create a system of excluding certain enterprises from participation in such tenders thus protecting the honest entrepreneurs. This, in itself, is an excellent proposal, but it is not clear what will the measure be that will prevent the participation of firms with economic links to organised crime given that such a link can be hidden relatively easy.

The developments around the ambitious report of the special committee are yet to unfold as the compromise amendments are expected to be voted by the committee on May 7th when the report will also be viewed at an inter-parliamentary session (with representatives of national parliaments). On June 13th, it is expected the report to be viewed in the plenary. The developments until now show that the expectations for the anti-mafia committee are very high. On the one hand, for a very long time corruption, organised crime and money laundering have left national borders and have turned into a trans-border problem that requires supranational approach. In the same time, some member states have proved incapable of tackling the issue on national level, which in a combination with the lack of pressure from the outside only deepens the problems instead of solving them. We are yet to see also what will the response be to the report in the member states.