BRUSSELS—European Union capitals approved a major crackdown on the revenue streams of terrorist groups on Nov. 4 after the continent was rocked by a string of new atrocities in France and Austria.
At a meeting held via video link due to the pandemic, finance ministers approved the creation of a new regulator that will have sweeping powers to combat money laundering across the bloc’s 27 member states.
They also agreed to write common legislation on fighting fraud into their domestic rulebooks for the first time, ending a patchwork of different rules that terrorists and organized crime gangs have been able to exploit.
Europe’s battle against extremist groups has been been thrown into sharp focus once more after separate attacks in France and Austria, both carried out by radical Islamists.
Brussels has been pressing hard for new measures that will hit terrorist organizations in their pocketbooks, combined with a separate crackdown on the distribution of their propaganda online.
After the move was approved by the capitals, the EU Commission, the bloc’s executive body, announced that it will bring forward legislation in the first three months of 2021.
“Money laundering erodes trust in our banks and financial institutions, in our authorities and our governments. Dirty money is highly mobile,” said EU Commission Vice President Maros Sefcovic.
German Finance Minister Olaf Scholz said the agreement will strengthen the fight against terrorism.
Calls for new legislation grew when charges were brought against Danske Bank in 2018 over 200 billion euros ($230 billion) of suspicious transactions that went through one of its branches in Estonia, highlighting loopholes in the system.
Among four charges laid by Danish prosecutors was one alleging the bank had failed to check where customers’ funds were coming from and whether the money could be used to finance terrorism.
Sven Giegold, a German member of the European Parliament representing the Green Party, said the harmonization of rules and creation of a new regulator were “particularly positive” developments.
However, he said member states’ rejection of a proposal to create a new unit at the bloc’s police force, Europol, with the power to start independent cross-border investigations into financial crimes was disappointing.
Brussels is separately facing difficulties in its bid to force the swift removal of online terrorist propaganda due to an internal battle between EU capitals and some blocs of EU lawmakers.
The Commission put forward proposals two years ago that would give national authorities the power to issue Europe-wide orders to websites to remove extremist content within an hour.
Member states support the move, but it’s opposed by some lawmakers who say there are risks to civil liberties and free speech, and want each country to have the final say over what is taken down. Many capitals fear this would render the legislation ineffective across borders, effectively nullifying the main benefits of the legal tool.
The European People’s Party, the bloc’s pan-continental center-right grouping, is hoping the urgent need for action in light of the recent terror attacks will help unlock the impasse.
In a letter to European Council President Charles Michel on Nov. 3, two of the group’s most senior members backed a compromise that would grant countries the right to refuse problematic requests to remove content.
“A series of horrendous terrorist attacks on EU soil over the past few years … has demonstrated the urgent need for action against terrorist propaganda on the internet. … We cannot afford further delays,” the lawmakers wrote.