The result of the European Court of Auditors special report 13/2021

As of June 28,2021 the European Court of Auditors issued its special report 13/2021 about its investigation on the efficiency and effectiveness of the money laundering fight within the European Union with the headline EU efforts to fight money laundering in the banking sector are fragmented and implementation is insufficient.

The European Court of Auditors detailed that during their audit they found institutional fragmentation and poor co-ordination at EU level when it came to actions to prevent ML/TF and to take action where risk was identified. In
practice, AML/CFT supervision still takes place at national level with an insufficient EU oversight framework to ensure a level playing field.

Thousands of victims with millions of losses as result of the poor performance

EFRI definitly can reconcile these findings. But the European Court of Auditors forgot to tell about the “actual” results of these poor performance on cross-border coordination and poor performance to take actions against financial institutions being involved in money laundering issues. The “actual” results are thousands of ripped off unsuspecting European consumers who lose millions of their life savings to unscrupulous criminal organizations – customers of the European financial institutions.

If BAFIN had timely taken decisivly and appropriate (closing down actions) on Wirecard, a Fintech heavily involved in Cybercrime activities with offering its payment services to boiler room scams around the Cartu brothers (Grey Mountain Management) as well as to the shabby Cyprus broker industry, hundreds of people who have transferred their money via Wirecard´s account to the scammers maybe would not have been hurt.

The same is applicable for Deutsche Handelsbank. It must have been known for years already, that Deutsche Handelsbank has material issues. BAFIN did not take appropriate actions like withdrawing the banking licence but left them going on with their services for shabby e-money companies and illegal payment services companies for many years resulting in hundreds of millions of stolen money being processed via Deutsche Handelsbank.

We think that the European supervisory authorities for the payment institutions/banks/e-money insitutions have to start to do a proper job finally and to act decisively and swiftly in order to finally address the existing material money laundering issues.

The rising Cybercrime Threat

The world faces several threats, one of the newest threats we are facing, and perhaps the fastest growing, are those in cyberspace.  Cyber criminals, hackers and foreign adversaries are becoming more sophisticated and capable every day in their ability to use the Internet for nefarious purposes.

We are dependent on the Internet – we use it for everything. We communicate online, bank and shop online, and store much of our personal information there. The economies globally count on having ready access to the Internet and its many capabilities as we go about our daily routines. The Internet opens new worlds to users and to criminals.

The cost of cybercrime – already in the billions of dollars and Euros – rises each year.


Why we want EBA to get active asap?

Within Europe, Europol estimates that the value of suspicious transactions is equivalent to about 1.3 % of EU GDP. Across the globe, the figure is estimated to be close to 3 % of world GDP. Recent data shows that over 75 % of suspicious transactions reported in the EU came from credit institutions in more than half of the Member States[1].

Financial institutions must start to act as gatekeepers to the financial system and have therefore an immense important role in the collective fight against the rising Cyber Threat.

The usage of the Incumbent financial system is essential to the intake of the victims’ money, to launder it and, finally, to transfer the money to bank accounts under the direct control of the scammers.   

Without their illicit proceeds used to fund criminal activities, the lifeblood of the scammers operations is disrupted.

Financial institutions failing to do proper customer due diligence and to monitor transactions undermine the trust of citizens in financial institutions, negatively affect market integrity and threaten the stability of the financial system. 

The EBA recently got an enhanced mandate to lead, to coordinate and to monitor AML/CFT efforts in the European Union,            

We understand that EBA is supposed to coordinate supervisory actions at Union level to ensure that financial institutions apply effective and robust AML/CFT controls wherever they operate in the single market[2].

The EBA[3] has the power to investigate a potential breach of Union law (BUL) relating to AML/CFT legislation at Member State level. This could involve inadequate supervision allowing large volumes of ML/TF to take place in a bank

EBA seems to be the appropriate authority considering that cybercrime attacks like as boiler room frauds do not know country borders and damage and hurt victims all over Europe. 

It is evident that national interests can prevent the start of a criminal investigation for money laundering notwithstanding evident evidences and proofs are given.

The role of a Dutch payment institution (licensed and supervised with the DNB) in a transnational criminal organization

Already on June 5, 2019 EFRI sent numerous documents about the cooperation of PAYVISION with the criminal organizations of Gal BARAK and Uwe LENHOFF to the relevant supervisory authority in Denmark (de Nederlandsche Bank/DNB) as well as to ING for appropriate actions against the former board of management.

Up to now we have not learned about Dutch money laundering investigations being launched at a request of DNB against the former board of management of PAYVISION resp. PAYVISION.  

Despite ING supports the idea about Environmental Social Governance (ESG) in so many press releases and stress the importance of integrity heavily, they evidently do not care about harmed European consumers.

Not investigating PAYVISION and the former board of management publicly for proven failure to comply with Know Your Customer rules and transaction monitoring for so many years and  their evidenced involvement with criminal organizations specially after the close personal relationship between the board of management and the beneficial owners of the criminal organizations (specifically Uwe LENHOFF) got evident, does not seem to be appropriate with all the Cybercrime Threats ahead of us and with the specific drug situation in the Netherlands.

On behalf of 988 European victims from cybercrime attacks we ask the EU authorities to finally start fighting money laundering seriously and to start to hold the management of financial industry players responsible for supporting cybercriminal activities.

The full letter can be read here.

[1] Press Release on the Report of the European Court of Auditors on The EU needs a stronger and more coherent oversight framework for combating money laundering


[3] Regulation (EU) No 1093/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Banking Authority), amending Decision No 716/2009/ EC and repealing Commission Decision 2009/78/EC, OJ L 331, 15.12.2010, pp. 12-47, as lastly amended by Regulation (EU) 2019/2175 of the European Parliament and of the Council of 18 December 2019.

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