Didier Reynders could avoid investigation over Lottery funds through EU’s New AML Regulation
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10 Dec 2024 •
Reading time: 2 minutes Former European Commissioner Didier Reynders is at the heart of a sensitive judicial investigation in Belgium. He is suspected of having used the National Lottery to launder funds, an accusation that raises questions about the flaws in control systems in Europe. Ironically, a new European anti-money laundering (AML) law, expected in 2027, could paradoxically protect actors like Reynders by exempting national lotteries from certain rigorous controls.
A controversial law
The European Union’s new anti-money laundering (AML) law, scheduled to enter into force in 2027, is an ambitious reform aimed at strengthening mechanisms to combat illicit financial flows. It comes at a time when money laundering scandals, often involving colossal sums, have tarnished the reputation of several Member States. However, one particular provision, introduced late, raises concerns: the exemption of national lotteries.
The main objective of the legislation is to modernise and harmonise anti-money laundering rules across the 27 Member States. The final text of this regulation includes a controversial clause that classifies national lotteries as low-risk money laundering entities.
The potential consequences
By classifying national lotteries as low-risk entities, Member States will be able to request an exemption from certain AML obligations, subject to approval by the European Commission. These exemptions could include:
- A reduction in reporting obligations for suspicious transactions.
- A limitation on external audits imposed on lotteries.
- Less monitoring of financial flows related to the activities of these entities.
The European Commission did not propose this exemption in its initial 2021 draft. It was added following pressure from some MEPs, particularly from Member States with economic interests in their national lotteries. Negotiations over this clause have been tense until the end of 2023, reflecting significant differences between stakeholders.
A troubling timing
The coincidence between the introduction of the new law and the Reynders affair is puzzling. Didier Reynders denies any influence on the regulation or the Lottery during his term, but critics point out that he was in charge of the European Justice at the time discussions on the law were underway. Could this exemption be used to minimise the legal risks he faces? This is the view of some, who wonder whether this legislation could indirectly protect practices currently under investigation.
While the new AML law has been praised for its ambition, its effectiveness could be jeopardised by this controversy. Critics are calling for a review of these exemptions before the legislation comes into force, to ensure that all entities, including national lotteries, are subject to rigorous and fair controls.