Egmont Group and Europol a new strong cooperation

During the 24th Egmont Group Plenary Meetings that took place in Macau, the European Commissionand Europol were awarded Observer Status of the Egmont Group of Financial Intelligence Units(FIUs).

The decision will lead to increased cooperation not only between , but other competent authorities tasked with combating money laundering, terrorist financing and organised crime, facilitated by Europol’s role as an European hub in support of Member States on ongoing operations.

The Egmont Group is a united body of over 150 FIUs that provides a platform for the secure exchange of expertise and financial intelligence to combat money laundering and terrorist financing. At the meeting, Ms Hennie Verbeek-Kusters (FIU Netherlands) was appointed as Chair of the Egmont Group for the coming two years.

The European Commission and Europol strongly support the objectives of the Egmont Group by encouraging cooperation between FIUs at an EU level.

Europol & @EU_Commission awarded Observer Status of @EGFIU https://t.co/drWxhzEQap #MoneyLaundering #TerroristFinancing

— Europol (@Europol) July 17, 2017

Together with EU FIUs, the European Commission and Europol are actively involved in ensuring the integrity of European markets through work with the EU FIU Platform, FIU.net, the recently implemented Fourth Anti-Money Laundering Directive and the implementation of the EU Action Plan against terrorist financing.

New EU rules that strengthen the role of and cooperation between FIUs came into force across Europe on 26 June.

Commission approves aid for market exit of BPVI and Veneto Banca

Commission approves aid for market exit of BPVI and Veneto Banca under Italian insolvency law, involving sale of some parts to Intesa Saopaolo

The European Commission has approved, under EU rules, Italian measures to facilitate the liquidation of BPVIand Veneto Banca under national insolvency law. These measures involve the sale of some of the two banks’ businesses to be integrated into Intesa Sanpaolo. Deposits remain fully protected.

This announcement follows the declaration by the European Central Bank (ECB), in its capacity as supervisory authority, of23 June 2017 that Banca Popolare di Vicenza (BPVI) and Veneto Banca were failing or likely to fail and the decisions bythe Single Resolution Board (SRB), the competent resolution authority, that resolution action is not warranted in the public interest in either case. EU law foresees that, in such circumstances, national insolvency rules apply and it is for the responsible national authorities to wind up the institution under national insolvency law. In this context, if Member States consider public support necessary to mitigate the effects of a bank’s market exit, EU State aid rules apply, in particular the 2013 Banking Communication, requiring that shareholders and subordinated bondholders fully contribute to the costs (so-called “burden-sharing”) and competition distortions are limited. Senior bondholders do not have to contribute and depositors remain fully protected in line with EU rules.

Commissioner in charge of competition policy, Margrethe Vestager, said: “Italy considers that State aid is necessary to avoid an economic disturbance in the Veneto region as a result of the liquidation of BPVI and Veneto Banca, who are exiting the market after a long period of serious financial difficulties. The Commission decision allows Italy to take measures tofacilitate the liquidation of the two banks: Italy will support the sale and integration of some activities andthe transfer of employeesto Intesa Sanpaolo. Shareholders and junior creditors have fully contributed, reducing the costs to the Italian State, whilst depositors remain fully protected.These measures will also remove €18 billion in non-performing loans from the Italian banking sector and contribute to its consolidation.“

The SRB has concluded that resolution action is not warranted in the public interest for either BPVI or Veneto Banca, which means that Italian authorities have to wind-down the banks under Italian national insolvency procedures. In this context, Italy has determined that the winding up of these banks has a serious impact on the real economy in the regions where they are most active. Outside the European banking resolution framework, EU rules foresee a possibility for Italy to seek Commission approval for the use of national funds to facilitate the liquidation by mitigating such regional economic effects. As the aided banks exit the market there should be no distortion of competition in European banking markets.

Outside the European banking resolution framework, EU rules foresee a possibility for Italy to seek Commission approval for the use of national funds to facilitate the liquidation by mitigating such regional economic effects. As the aided banks exit the market there should be no distortion of competition in European banking markets.

On 24 June 2017, Italy notified to the Commission its plans to grant State aid to wind-down BPVI and Veneto Banca.The measures will enable the sale of parts of the two banks’ activities to Intesa, including the transfer of employees. Italy selectedIntesa Sanpaolo (Intesa) as the buyerin an open, fair and transparent sales procedure: The measures will also enable the wind down of the remaining liquidation mass, financed by loans provided by Intesa.

In particular, the Italian State will grant the following measures:

• Cash injections of about €4.785 billion; and
• State guarantees of a maximum of about €12 billion, notably on Intesa’s financing of the liquidation mass. The State guarantees would be called upon notably, if the liquidation mass is insufficient to pay back Intesa for its financing of the liquidation mass.

Both guarantees and cash injections are backed up by the Italian State’s senior claims on the assets in the liquidation mass. Correspondingly, the net costs to the Italian State will be much lower than the nominal amounts of the measures provided.

The Commission found these measures to be in line with EU State aid rules, in particular the 2013 Banking Communication. Existing shareholders and subordinated debt holders have fully contributed to the costs, reducing the cost of the intervention for the Italian State.Both aid recipients, BPVI and Banca Veneto, will be wound up in an orderly fashion and exit the market, while the transferred activities will be restructured and significantly downsized by Intesa, which in combination will limit distortions of competition arising from the aid.

The subsequent deep integration by Intesa will return the sold parts to viability. The Commission also confirmed that the measures do not constitute aid to Intesa, because it was selected after an open, fair and transparent sale process, fully managed by Italian authorities, ensuring that the activities were sold at the best offer available.