Opinion of the European Economic and Social Committee on the ‘Proposal for a Directive of the European Parliament and of the Council laying down rules facilitating the use of financial and other information for the prevention, detection, investigation or prosecution of certain criminal offences and repealing Council Decision 2000/642/JHA’

(COM(2018) 213 final — 2018/0105 (COD))

(2018/C 367/16)

Rapporteur-general:

Victor ALISTAR

Referral	European Parliament, 28.5.2018
Legal basis	Article 87(2) of the Treaty on the Functioning of the European Union
Section responsible	Employment, Social Affairs and Citizenship
Bureau decision	22.5.2018
Adopted at plenary	12.7.2018
Plenary session No	536
Outcome of vote (for/against/abstentions)	176/0/1

1.   Conclusions and recommendations

1.1.

The EESC notes that EU action here aims to generate added value by providing a harmonised approach that strengthens domestic and cross-border cooperation in financial investigations on serious crimes and terrorism. In addition, action at EU level will help to ensure harmonised provisions, including on data protection, in order to effectively guarantee a common area of security and justice.

1.2.

In order to achieve this goal, the regulatory framework for the Financial Intelligence Units (FIUs), established under Article 114, must be supplemented by a legal instrument based on Article 87(2) of the Treaty on the Functioning of the European Union (TFEU). The option chosen is to correlate access to financial information in accordance with the Fifth Anti-Money Laundering Directive (AMLD) (1), with mechanisms for judicial cooperation between Member States.

1.3.

The proposal for a directive is an instrument aimed at bolstering the capacity to investigate and prosecute crime throughout the EU, ensuring that the relevant authorities in the Member States have more direct access to financial data, in order to track the proceeds of crime and identify patterns of crime.

1.4.

According to the Commission, the scope of the proposal is the investigation and prosecution of crime by means of judicial cooperation; to define serious criminal offences, it refers in Article 2(l) of this proposal to Article 3(1) of Regulation (EU) 2016/794 on Europol (2). On this point, the EESC considers it necessary to demarcate more specifically and restrictively the list of crimes for which this mechanism can be used.

1.5.

The proposal for a directive should strike a better balance between the fundamental rights of individuals, enshrined in the Treaty on the Functioning of the European Union, and the need for better law enforcement in combating and prosecuting crime, in order to ensure a climate of security and justice across the EU.

1.6.

For the purposes of balance between access to the financial data of European citizens and the need-to-know principle, the directive needs to restrict itself solely to detecting and prosecuting offences, and not, in principle, extend to overly generic preventive purposes; the well-founded case principle should be applied here.

1.7.

The centralised bank account registries could also include financial information relating to the investment accounts of capital market investment managers, given that modern forms of money laundering and concealment of the proceeds of crime also involve investments in capital markets. Furthermore, the EESC calls on the Commission to undertake an analysis exploring the possibility of interlinking the data collected under the Fifth AMLD (3), under the present Directive and under the Fourth DAC (Directive on administrative cooperation in the field of taxation) (4), regarding the latter for documentation of severe crimes only, and with the only objective of noting disparities in the data collected during the investigations and the information managed.

1.8.

As regards the legislative technical aspects, the EESC recommends that Article 17 be supplemented with procedural provisions referring to other European legislation on judicial cooperation and the exchange of financial information with third countries.

1.9.

The EESC calls on the Commission to amend the definitions in Article 2(f) ‘law enforcement information’ and (l) ‘serious criminal offences’, so as to ensure the clarity, predictability and proportionality of the rules establishing the mechanisms for access to the financial data of EU citizens.

1.10.

Furthermore, the EESC calls on the Commission to regulate the purpose of access to the data contained in the national centralised bank account registries by limiting access for preventive purposes to crimes that affect the collective and individual security of European citizens (i.e.: terrorism, human trafficking and drug trafficking) and allowing access for the purposes of detecting, investigating or prosecuting or recovering the proceeds of offences for all serious crimes.

2.   Background to the opinion

2.1.

Criminal groups, including terrorists, operate across different Member States and their assets, including bank accounts, are usually located across the EU or even outside of it. They make use of modern technology that allows them to transfer money between several bank accounts and between different currencies in a matter of hours.

2.2.

The EESC notes that EU action here aims to generate added value by providing a harmonised approach that strengthens domestic and cross-border cooperation in financial investigations on serious crimes and terrorism. In addition, action at Union level will help to ensure harmonised provisions, including on data protection, whereas if Member States are left to legislate independently, a harmonised level of safeguards will be difficult to achieve.

2.3.

The Fifth Anti-Money Laundering Directive (AMLD) (5) establishes centralised bank account registries at national level, which increase the processing capacity and effectiveness of the Financial Intelligence Units (FIUs). To ensure more effective investigations and prosecutions of criminal offences, the relevant judicial authorities need faster access to the financial information. To this end, the legal framework for the FIUs, established under Article 114, needs to be completed by a legal instrument based on Article 87(2) TFEU.

2.4.

Thus, the relevant authorities will have direct access to the national centralised bank account registries, and this will facilitate the work of the judicial authorities, tax authorities and anti-corruption authorities that have investigative powers established under national law. The relevant authorities here also include the Asset Recovery Offices which are responsible for the tracing and identification of criminal assets in view of their possible freezing and confiscation, in order to ensure that criminals are deprived of this income.

2.5.

According to the Commission, the scope of the proposal is the investigation and prosecution of crime by means of judicial cooperation; to define serious criminal offences, it refers in Article 2(l) of this proposal to Article 3(1) of Regulation (EU) 2016/794 on Europol (6). On this point, the EESC considers it necessary to demarcate more specifically and restrictively the list of crimes for which this mechanism can be used.

2.6.

Furthermore, access to the national centralised bank account registries is also granted to European prosecutors under Regulation (EU) 2017/1939 (7), which will result in increased capacity to investigate fraud against the financial interests of the European Union.

3.   General comments

3.1.

The EESC recognises the importance of cooperation mechanisms between the Member States’ law enforcement authorities and welcomes the Commission’s initiative to create faster and more direct mechanisms enabling the relevant authorities in the Member States to access financial data held in other EU countries.

3.2.

This proposal for a directive is an instrument aimed at bolstering the capacity to investigate and prosecute crime throughout the EU, ensuring that the relevant authorities in the Member States have more direct access to financial data, in order to trace the proceeds of criminal offences and identify patterns of crime.

3.3.

The proposal for a directive should strike a better balance between the fundamental rights of individuals, enshrined in the Treaty on the Functioning of the European Union, and the need for better law enforcement in combating and prosecuting crime.

3.4.

Thus, the right to privacy and the protection of privacy should be curtailed only where this is proportionate to the public interest of ensuring a climate of security and justice across the EU.

3.5.

For the purposes of balance between access to the financial data of European citizens and the need-to-know principle, the directive should restrict itself to detecting and prosecuting offences, and not, in principle, extend to overly generic preventive purposes; the well-founded case principle should be applied here.

3.6.

Access to the financial data should be granted only to authorities responsible for investigating and prosecuting criminal offences, as well as to Asset Recovery Offices, on the basis of a well-founded case, so as not to create sets of metadata held by national or European entities that do not have their own detection or investigative powers.

3.7.

The centralised bank account registries could also include financial information relating to the investment accounts of capital market investment managers, given that modern forms of money laundering and concealment of the proceeds of crime also involve investments in capital markets.

3.8.

The proposal for a directive should also include procedural provisions referring to other EU legislation on judicial cooperation and on the exchange of financial information with third countries, in order to comply with the following two imperatives: firstly, the definition of comprehensive legal rules relating to judicial procedures for the valid collection of evidence when complementary to other legislative instruments, and, secondly, the more extensive implementation of the public policy objectives set out in the explanatory memorandum of the proposal for a directive and in the ex post analysis carried out by the Commission.

3.9.

The EESC notes and welcomes the fact that the Commission’s proposal for a directive sets out very clear provisions for the protection of fundamental rights; it notes, however, that the scope of these provisions is limited to the protection of personal data transferred via the mechanism introduced by the directive and to access to the centralised bank account registries, but does not contain specific rules on the protection of fundamental rights with regard to the protection of privacy and the provision of procedural guarantees relating to the curtailment of these rights.

4.   Specific comments and recommendations

4.1.

To ensure that, in the course of implementing the cooperation instruments established by this proposal for a directive, the curtailing of fundamental rights to privacy does not go further than is duly proportionate, the preventive objective needs to be removed from the definition of financial information [set out in Article 2(e)], without affecting the definition in the Fifth AMLD (8), which remains unaltered under Article 1(2)(a) of this proposal for a directive. This will eliminate the risks of breaching the TFEU provisions on fundamental rights.

4.2.

Analysing the definition of serious offences, which is laid down in Article 2(l), which refers to Annex 1 of Regulation (EU) 2016/794 on Europol (9), and supported by the spirit of the text of the proposal for a directive and by the provision allowing access in order to prevent serious crimes, the access is found to be disproportionate to the general objective pursued. For example, access to individuals’ financial data could be granted in order to prevent fatal road accidents or offences relating to racism, xenophobia or blackmail.

4.3.

The EESC recommends that the definition under Article 2(l) be amended as follows: ‘serious criminal offences’ means the following forms of crime: terrorism; organised crime; drug trafficking; trafficking in human beings; corruption; money laundering activities; crime connected with nuclear and radioactive substances; immigrant smuggling; illegal trade in organs and tissues; kidnapping, illegal restraint and hostage-taking; robbery and aggravated theft; illicit trafficking in works of art, antiquities and cultural goods; crime against the financial interests of the Union; insider dealing and financial market manipulation; racketeering; counterfeiting and product piracy; forging of money and means of payment; trafficking in arms, ammunition and explosives; environmental crime, including ship-source pollution; sexual abuse and sexual exploitation, including child abuse material and solicitation of children for sexual purposes; genocide, crimes against humanity and war crimes.

4.4.

In the same vein, in order to clarify the subject of the directive and to ensure its consistency with the stated public policy objectives, access to the national centralised bank account registries should be allowed for preventive purposes only for terrorism offences and drug trafficking or trafficking in human beings, and for the purposes of detecting, investigating, prosecuting, sanctioning, and recovering damages, both for the above crimes and for all other offences, as defined in the proposal for a directive.

4.5.

Article 5 of the proposal for a directive should be supplemented by a new point (point (3)) establishing guarantees of proportionality and legitimacy regarding access by law enforcement authorities to private data (including financial data). In this respect, the new point 3 should provide for the obligation to examine requests for access on a case-by-case basis, under the well-founded case principle, so that — insofar as they later become judicial evidence — these retrievals of data comply with the conditions of legality governing the recovery and use of evidence, and uphold fundamental rights and freedoms, including the right to a fair trial, as established by the established practice of the European Court of Human Rights (ECHR) in Strasbourg, and can be used successfully by national courts in penalising offences.

4.6.

In this respect, providing access to the financial information of natural persons subject to the national safeguards laid down in Articles 7 and 8 is not sufficient, given that this information can also be accessed by structures that do not have their own investigative powers such as Europol, as provided for in Article 10.

4.7.

Article 7(1) needs to be brought into line with the observations made above in point 4.1 of this opinion with regard to Article 2(e) of the proposal for a directive. It is proposed, therefore, to amend the text as follows: ‘(…) is necessary (…) for the prevention of terrorism offences, human trafficking and drug trafficking, and for the detection, investigation or prosecution of those crimes and of the other serious criminal offences’. For consistency and symmetry, the same amendment is proposed for Article 7(2).

4.8.

In Article 9(4), the EESC welcomes the fact that the proposal for a directive establishes that in the event that FIU.net suffers a technical malfunction, the alternative means used to transmit the data must comply with the same security conditions as the FIU.net network. Accordingly, the EESC believes that the alternative means of transmitting the financial data must also be capable of producing a written record under conditions that allow authenticity to be ascertained, as is the case with FIU.net.

4.9.

With regard to Article 10, which establishes Europol’s access to the data in parallel with the access of the competent authorities referred to in Article 3, the EESC calls for this right of access to be established in relation to Europol’s own investigative powers and accompanied by the necessary safeguards for metadata analysis.

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(1)  Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018 amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, and amending Directives 2009/138/EC and 2013/36/EU (OJ L 156, 19.6.2018, p. 43).

(2)  Regulation (EU) 2016/794 of the European Parliament and of the Council of 11 May 2016 on the European Union Agency for Law Enforcement Cooperation (Europol) and replacing and repealing Council Decisions 2009/371/JHA, 2009/934/JHA, 2009/935/JHA, 2009/936/JHA and 2009/968/JHA (OJ L 135, 24.5.2016, p. 53).

(3)  See footnote 1.

(4)  Council Directive (EU) 2016/881 of 25 May 2016 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation (OJ L 146, 3.6.2016, p. 8).

(5)  See footnote 1.

(6)  See footnote 2.

(7)  Council Regulation (EU) 2017/1939 of 12 October 2017, implementing enhanced cooperation on the establishment of the European Public Prosecution Office (‘the EPPO’) (OJ L 283, 31.10.2017, p. 1).

(8)  See footnote 1.

(9)  See footnote 2.