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Austria, Belgium and Holland taken to court over MLD4

Chris Hamblin, Editor, London, 12 July 2020

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The European Commission, the nearest thing that the European Union has to an executive branch, has taken three EU countries to the Court of Justice of the EU for failing to implement all the rules of the fourth Money-Laundering Directive by the deadline of 26 June 2017.

The commission is asking the court to impose financial sanctions on the nations for failing to enshrine all of the directive in their laws. They should have enacted betting and gambling legislation (Austria), laws to make Financial Intelligence Units exchange documents and information (Belgium) and laws to force agencies to supply officials around the EU with information about the beneficial ownership of corporate andother legal entities (Holland). The commission opened "infringement proceedings," as it calls its appeals to the court, although it has only just decided to take these three to court. The other five are unnamed and commission spokespeople were out of contact at press time. Two other nations are awaiting court appearences and the commission has sent three of them "reasoned opinions" (formal requests to obey EU law).

According to the EU treaties, the commission can take legal action – a so-called infringement procedure – against any EU country that fails to implement EU law, according to its investigations or to rumours that it has heard. Its first formal step is always to ask the country for information about the alleged problem, usually giving it two months to reply before going on to the next stage - deciding whether or not the country is failing to obey the law. If it decides that it is not, it may explain why in an imperious "reasoned opinion" that asks the country to tell it whether it has rectified the matter, usually within two months. If it does not do anything, or does not reply, the commission can take it to court. Most cases are settled before this stage. Only the court can set penalties.

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