The EU is set to explore the creation of a new central authority to tackle money laundering after a series of high-profile scandals highlighted the bloc's weakness in preventing dirty cash flowing through its banks.
According to the Financial Times, France and the Netherlands are pushing for a European enforcement body in order to avoid fresh crises following the scandals with Russian money and Danske Bank.
The proposed body would monitor financial institutions' compliance with EU regulations on customer due diligence, among other safeguards.
Criminals and terrorists are taking advantage of loopholes, [undermining] trust in our financial system and our mission to protect our economies and citizens"
"Criminals and terrorists are taking advantage of loopholes, [undermining] trust in our financial system and our mission to protect our economies and citizens," French finance minister Bruno Le Maire told the Financial Times.
EU regulators were caught off guard last year by one of the largest money-laundering scandals ever, involving some 200 billion euros ($219bn) in suspicious payments, between 2007 and 2015, through Danske Bank's tiny Estonian branch.
Last year, US authorities uncovered institutionalised money laundering at Latvian bank ABLV - which has since entered voluntary liquidation, while ING was fined €775m (£668m) for errors in its policies to stop financial crime.
The draft text says the Commission should consider the transfer of money-laundering supervisory powers to an EU agency and proposes a mechanism to coordinate national investigators.
Despite criminal organizations frequently laundering the proceeds of their illegal activities abroad, the fight against financial crime is mostly dealt with by national authorities, which do not always fully cooperate.
The existing pan-EU banking regulator, the European Banking Authority (EBA) has been criticised by members of the European Parliament over its failure to act on recent scandals.
The European Central Bank and the EU Parliament have said a body with EU-wide oversight powers could address this shortcoming.
The text was prepared by the Finnish presidency of the EU after the bloc's finance ministers debated the matter at a meeting earlier in October.
Individual holdings breach limits