Editorial & Advertiser disclosure

Global Banking & Finance Review® is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.

Home > Banking > What can US banks learn from the EU about money laundering?

What can US banks learn from the EU about money laundering?

Published by Gbaf News

Posted on November 19, 2018

4 min read

Last updated: January 21, 2026

Illustration of money laundering concepts and regulations for banks - Global Banking & Finance Review — Visual representation of money laundering challenges and EU regulations. The image highlights the importance of UBO lists and international cooperation for banks in combating money laundering.

Karim Rajwani, Global AML Advisor, Quantexa

Money laundering is, by nature, an international problem. In most cases, the process involves moving the profits of crime around the globe in order to obfuscate the trail behind it and, therefore, turn it into ostensibly legitimate assets.

But, Anti-Money Laundering (AML) legislation is not consistent on an international scale. Over the past several years, the European Commission has taken several steps in an attempt to curb its growing money-laundering issue. Its latest development, known as the EU’S 5th Money Laundering Directive, introduces a range of new requirements that ought to be considered by US banks too.

One of the primary focuses of the EU’s 5th Money Laundering Directive is to encourage cooperation on an international level between its member states and their leading financial institutions. One way this is being encouraged is the creation of a centralised and public Ultimate Beneficial Owner (UBO) list. Essentially, this is a list of all the owners and beneficiaries of each company that the bank is involved with. The EU’s previous money laundering directive had required that each institution had its own UBO list, but these new regulations require that these lists are publicly available.

UBO lists reduce the ability of criminals to hide their identity behind corporate structures. Historically, someone looking to legitimise a sum of money could start a company that would act as a front for an illegal organisation so that, on paper, the money appeared to be coming from lawful business practices. The introduction of required UBO lists has reduced this by obliging institutions to look further into the people behind each company.

Although the introduction of UBO lists has been successful, there are still ways that criminals have been able to work around it, by moving their money through countries and institutions where UBO background checks might be less likely to find them. The introduction of mandatory information sharing between nations and institutions will help to limit this. With a centralised register of UBO, it will be easier for any organisation to link potentially illicit businesses together via the same identified UBO. This is something that US banks must be looking to replicate.. At a national level, US states would benefit from the introduction of centralised UBO lists that compiles information from each federal government. Otherwise, the money that is being moved by money launderers is only moved in different patterns, through different states, rather than prevented altogether.

The EU’s 5th Money-Laundering Directive also calls for centralised and publicly accessible registers of Politically Exposed Persons (PEP Lists.) A PEP list is a list of positions (not actually the people themselves) who are politically exposed and therefore of greater significance in investigations regarding corruption. A cross-national PEP list is extremely valuable, because it will show connections between countries that might not have been visible beforehand. For example, two PEPs could be listed on their countries own lists and cleared of any illicit activity on a domestic scale, but a connection between them on an international scale, only made clear by a cross-national list, could expose an international involvement in money-laundering.

The concept of a PEP is not unfamiliar in the US – positions of similar significance are usually described as Senior Foreign Political Figures – but the entire process would become more effective if there was cooperation between governments and institutions in the USA and the EU. As processes for preventing money laundering continue to improve, the flow of illicit funds moves to places where it is less likely to be detected. International collaboration and the wider enforcement of AML policy that encourages means the options available to launderers will continue to narrow.

The EU has made sizeable headway with its money laundering problem. Perhaps due to the fact that Europe has itself been the place where the biggest and most shocking cases of laundering have occurred. Nevertheless, the European Commission’s commitment to eradicating the EU of such activity has been clearly evidenced by its latest AML directive. The USA must heed warning from the EU that international collaboration is the only way that nations will be able to tackle the problem properly, without just circumventing the flow of illicit funds away from its own domestic accounts. The creation of a global, public lists of Ultimate Beneficial Owners, and of all Politically Exposed Persons would have a profound impact on the efficacy with which criminal organisations are able to operate. As long as there are discrepancies in national policies, there will always be places for the profit of crimes to flow, and cooperation by the world’s leading nations is the only way to stop this from happening.