From AML Rules to Real Results: MONEYVAL’s Push for More Effective Financial Crime Enforcement

The ministers and senior officials responsible for anti-money laundering policy across MONEYVAL’s member jurisdictions gathered in Warsaw in April 2023 with a direct admission: Europe had improved its laws and international cooperation, but many national systems were still failing to deliver sufficient prosecutions, convictions and confiscation of criminal assets.

Their declaration committed member states and territories to strengthen the effectiveness of their anti-money laundering, counter-terrorist financing and counter-proliferation financing frameworks over the following five years. It also endorsed MONEYVAL’s strategy for 2023–2027 and prepared the organisation for a new cycle of mutual evaluations.

The commitment was significant because it shifted attention from the existence of laws and institutions to the results those systems produce.

A jurisdiction may have a modern AML statute, a financial intelligence unit, beneficial ownership registers and transaction-reporting requirements. None of those components automatically proves that serious money laundering is being detected, investigated or prosecuted—or that criminal proceeds are being recovered.

By 2025, MONEYVAL’s review of its fifth evaluation round showed substantial improvement in technical compliance across its jurisdictions. The same review continued to identify weaknesses in money-laundering enforcement, asset confiscation, financial intelligence, targeted financial sanctions and supervision of non-financial professions.

The central policy challenge has therefore remained unchanged: converting regulatory architecture into operational disruption.

Key Takeaways

• MONEYVAL Members Committed to Strengthening AML/CFT Effectiveness
• Illicit Finance Is Recognised as a Threat to Economic and Democratic Security
• Technical Compliance Alone Is Not Sufficient
• Prosecution and Conviction Outcomes Remain a Key Weakness
• Asset Seizure and Confiscation Require Greater Effectiveness
• International Cooperation Is a Relative Strength Across MONEYVAL Members
• Terrorist Financing Remains a Core Supervisory Priority
• Proliferation Financing Is Increasingly Integrated Into AML/CFT Frameworks
• Organised Crime, Corruption, Fraud and Cybercrime Remain Major Predicate Risks
• Political Commitment Is Essential to Effective AML Reform
• MONEYVAL’s 2023–2027 Strategy Prioritises Stronger Implementation
• The Sixth Round of Mutual Evaluations Raises the Focus on Effectiveness
• Cooperation With FATF and Other Regional Bodies Is Expanding
• AML/CFT Frameworks Must Deliver Measurable Real-World Outcomes

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Why the Warsaw commitments matter now

Money laundering is not an isolated offence at the end of a criminal process. It is the financial infrastructure that allows organised crime, fraud, corruption, trafficking, cybercrime and sanctions evasion to generate sustainable economic power.

Criminal organisations need to move value, conceal ownership, acquire assets and reinvest proceeds. Where national controls are weak, professional facilitators and financial intermediaries can provide the corporate structures, accounts, property and documentation required to distance those assets from the original offence.

The Warsaw declaration recognised illicit finance as a threat to economic development, democratic governance, financial-system integrity and the rule of law.

It also reflected the geopolitical environment created by Russia’s invasion of Ukraine. Ministers called for continued vigilance concerning sanctions-related risks, grand corruption, organised-crime links, malicious cyber activity and the seizure or confiscation of assets connected to unlawful conduct.

The declaration was therefore broader than a technical AML statement. It presented financial-crime controls as part of Europe’s institutional security framework.

What MONEYVAL does—and what it does not do

MONEYVAL is a permanent monitoring body of the Council of Europe and an associate member of the Financial Action Task Force global network.

It assesses whether participating jurisdictions comply with international standards for combating money laundering, terrorist financing and proliferation financing. It also evaluates whether those standards are implemented effectively.

MONEYVAL does not investigate individual bank accounts, prosecute criminal cases or directly supervise financial institutions. Those responsibilities remain with national authorities.

Its principal tool is the mutual evaluation: a peer-review process in which experts examine a jurisdiction’s legislation, institutions, risk understanding, supervision, law enforcement, international cooperation and operational results.

The resulting report identifies strengths, deficiencies and recommended actions. The jurisdiction then enters a follow-up process through which its progress is monitored.

This system relies heavily on peer pressure and public accountability. An adverse evaluation can affect a jurisdiction’s reputation, correspondent-banking relationships, investment environment and perceived exposure to financial crime.

Where progress remains inadequate, MONEYVAL can apply compliance-enhancing procedures, including intensified reporting, high-level political engagement and possible referral for consideration within the FATF’s international review process.

Technical compliance is not the same as effectiveness

A recurring problem in global AML policy is the tendency to measure success through the adoption of legislation.

Technical compliance asks whether a jurisdiction has implemented the legal and institutional requirements contained in the FATF Recommendations. This includes criminal offences, customer due diligence, suspicious-transaction reporting, beneficial ownership, supervisory powers and international cooperation.

Effectiveness asks whether the system works in practice.

Are financial institutions identifying meaningful suspicion? Is the financial intelligence unit producing information that supports investigations? Are law-enforcement bodies pursuing complex and professional money laundering? Are prosecutors obtaining proportionate convictions? Are courts confiscating criminal assets?

A jurisdiction can perform well technically while producing weak enforcement outcomes. It may have broad legal powers that are rarely used, large numbers of suspicious-transaction reports that generate little investigative value or asset-recovery legislation that produces limited confiscation.

The Warsaw declaration acknowledged this distinction. Ministers committed not only to improve compliance but to demonstrate visible effectiveness through the following evaluation cycle.

What the fifth evaluation round revealed

MONEYVAL’s fifth evaluation round began in 2015 and was completed in 2024.

Its later review showed a general improvement in technical compliance. Across MONEYVAL jurisdictions, 193 technical-compliance ratings had been upgraded, while only nine had been downgraded.

The strongest performance was recorded in areas including international cooperation, beneficial ownership transparency and supervision of financial institutions.

Those improvements are material. Cross-border crime cannot be investigated effectively without timely cooperation, and hidden corporate ownership remains central to corruption, fraud, sanctions evasion and tax crime.

The overall picture was nevertheless uneven.

MONEYVAL continued to identify weaknesses in the investigation and prosecution of money laundering, the recovery of criminal assets, the use of financial intelligence, targeted financial sanctions and supervision of designated non-financial businesses and professions.

This means jurisdictions were becoming better at building the required framework, but not always equally capable of using it to remove criminal wealth from the economy.

Why prosecutions remain difficult

Complex money laundering cases require investigators to reconstruct financial activity that may span several years, legal entities and jurisdictions.

The predicate crime may occur in one country, the proceeds may enter the banking system in another, and assets may be held through companies or trusts elsewhere.

Investigators need access to banking records, beneficial ownership data, tax information, communications, corporate documents and evidence from foreign authorities. Prosecutors must then demonstrate the criminal origin of the property and the defendant’s knowledge or intent to the applicable legal standard.

National systems can struggle where financial investigators, prosecutors and specialist judges lack sufficient resources or experience.

Authorities may instead rely on self-laundering cases connected directly to the original offender because they are easier to prove than professional laundering involving lawyers, accountants, company-service providers or third-party asset holders.

This creates an enforcement gap. The people generating criminal proceeds may be prosecuted, while the infrastructure that enabled those proceeds to be concealed remains intact.

MONEYVAL’s focus on convictions is therefore not simply a demand for higher numbers. It is a demand for cases that reflect the jurisdiction’s actual risks and address the individuals and structures sustaining illicit finance.

Asset recovery as the ultimate effectiveness test

A money-laundering conviction has limited disruptive value where the offender retains the economic benefit of the crime.

Confiscation removes the capital that allows criminal organisations to finance future activity, purchase legitimate businesses, corrupt officials and exercise influence within communities.

The Warsaw declaration specifically highlighted poor performance in the confiscation and final deprivation of illegal proceeds. It supported the introduction of benchmarks and tracking to measure asset-recovery performance in the next evaluation round.

Asset recovery is difficult because criminal ownership is frequently obscured. Property may be registered to relatives, companies, nominees or professional intermediaries. Assets may also be transferred or dissipated once the investigation becomes known.

Effective systems require early financial investigation, rapid freezing powers, cooperation between agencies and procedures for managing seized property.

They must also distinguish freezing from final recovery. A temporary restraint order may prevent immediate disposal, but the asset has not been permanently removed until confiscation or another lawful recovery process is completed.

For governments, the key question is not only how much property has been frozen. It is how much illicit value has been finally recovered relative to the proceeds generated by the country’s most material criminal threats.

Financial intelligence must become actionable

Financial intelligence units occupy a central position between the regulated private sector and law enforcement.

Banks, payment firms, casinos, estate agents and other obliged entities submit suspicious-transaction reports. The FIU analyses that information and disseminates relevant intelligence to investigative authorities.

High reporting volumes do not automatically produce an effective system.

Reports may be defensive, incomplete or delayed. Institutions may describe unusual transactions without explaining the suspected criminal purpose, connected parties or flow of funds. FIUs may also lack the technology, staffing or access to external data needed to prioritise the most significant cases.

MONEYVAL’s effectiveness assessments examine whether the FIU receives appropriate information, performs operational and strategic analysis and produces intelligence that authorities use.

A mature system should create a feedback loop. Investigations and prosecutions should inform typologies, typologies should improve private-sector detection, and improved reporting should support more targeted enforcement.

Without that cycle, suspicious-transaction reporting risks becoming a compliance-output exercise rather than an intelligence capability.

The continuing weakness outside banking

Financial institutions have received significant AML investment and regulatory attention. Criminal assets, however, often enter the legitimate economy through non-financial sectors.

Lawyers may create companies or manage client accounts. Accountants can prepare records that disguise the origin of funds. Estate agents and notaries participate in property transactions. Dealers in precious metals and stones handle portable stores of value.

These professions perform legitimate and essential services, and involvement in a high-risk transaction does not establish complicity.

The risk arises where supervision is fragmented, beneficial ownership is not verified, client money is insufficiently controlled or professional secrecy is misused to obstruct legitimate inquiry.

MONEYVAL’s fifth-round analysis continued to identify weaknesses in the supervision of designated non-financial businesses and professions.

Closing this gap requires more than extending bank-style rules to every sector. Supervisors need to understand each profession’s business model, transaction risks and methods of facilitation.

They must also demonstrate that breaches lead to proportionate and dissuasive sanctions rather than repeated warnings with limited behavioural impact.

Beneficial ownership must be accurate, not merely available

Public and central beneficial ownership registers have become a major part of European financial-crime policy.

Their value depends on the accuracy, completeness and timeliness of the information they contain.

A register populated through unverified self-declaration can reproduce the false information submitted by the company. Nominees, layered ownership and foreign legal arrangements may further obscure the individual exercising ultimate control.

Financial institutions should not treat registration as conclusive proof. Customer due diligencehttps://fincrimeintelligence.com/glossary/sanctions/ must reconcile registry data with incorporation documents, ownership structures, account activity and information obtained from reliable sources.

National authorities also need mechanisms to identify discrepancies, require correction and sanction deliberate misreporting.

MONEYVAL evaluations examine whether competent authorities can obtain adequate and current ownership information in practice—not simply whether a legal obligation to record it exists.

Targeted financial sanctions and proliferation financing

The Warsaw strategy includes counter-proliferation financing alongside AML and counter-terrorist financing.

Proliferation networks may use front companies, trade intermediaries, shipping structures, dual-use goods and payment routes designed to conceal the involvement of sanctioned persons or jurisdictions.

Effective targeted financial sanctions require institutions to freeze relevant assets without delay and prevent funds or economic resources from being made available to designated parties.

Weaknesses can arise from delayed domestic implementation, incomplete ownership analysis or overreliance on exact-name screening.

A sanctioned person may control an entity without appearing as the named customer. Goods, vessels, intermediaries and counterparties may also form part of the network.

The control objective therefore extends beyond list matching. Institutions and authorities must understand ownership, control, trade activity and the economic purpose of transactions.

The sixth evaluation round raises the standard

MONEYVAL launched its sixth evaluation round in 2024, becoming the first body within the FATF global network to begin the new cycle.

The round uses the revised FATF Recommendations and the updated evaluation methodology. It places greater emphasis on the quality, consistency and sustainability of outcomes.

The first on-site assessment was conducted in Latvia in November 2024, and the resulting report was adopted at a joint FATF–MONEYVAL plenary in June 2025. Further reports covering Serbia, Slovenia and Armenia followed within the developing programme.

Under the new approach, recommendations are intended to be more results-oriented, with clearer actions and timelines.

This increases pressure on jurisdictions to demonstrate that reforms have changed operational performance. Passing another amendment or creating another committee may not be sufficient where investigations, prosecutions and confiscations remain disproportionate to national risk.

Preventing unintended consequences

The Warsaw declaration also recognised that AML controls can cause harm when applied incorrectly.

Excessive de-risking can restrict access to financial services for non-profit organisations, migrant communities and customers connected to higher-risk regions. Governments can also misuse financial-crime laws to target political opponents, journalists, religious organisations or civil-society groups.

Effective AML policy must therefore remain risk-based, proportionate and consistent with human rights.

A higher-risk customer requires informed assessment, not automatic exclusion. A non-profit organisation operating in a conflict zone may need stronger governance and transaction controls, but its humanitarian purpose does not itself establish terrorist-financing risk.

The declaration further acknowledged increasing use of artificial intelligence in compliance and the need for data-protection and human-rights safeguards.

Automated systems can improve prioritisation, but poorly governed models can reproduce bias, generate unexplained decisions or direct scrutiny towards protected communities without sufficient evidential basis.

Political commitment must become institutional capacity

Ministerial declarations create direction but do not implement controls.

Effective national systems require trained investigators, specialist prosecutors, independent supervisors, capable FIUs, reliable data and courts able to manage complex financial evidence.

MONEYVAL’s strategy also recognised that the organisation itself requires sufficient assessors, secondees and financial resources to conduct credible evaluations.

This is significant because peer review depends on the quality and independence of the experts performing it. Weakly resourced evaluations can become formal exercises rather than rigorous tests of national performance.

Political ownership must therefore operate at two levels: governments must support MONEYVAL’s monitoring function, and they must fund the domestic institutions responsible for producing the outcomes being assessed.

What this means for financial crime leaders

MONEYVAL’s agenda is directed at national governments, but its consequences extend directly into regulated firms.

Mutual evaluations influence supervisory priorities, enforcement intensity, national risk assessments and expectations concerning customer due diligence, beneficial ownership, transaction monitoring and sanctions compliance.

Financial crime leaders should not wait for a negative country report to identify control weaknesses. They should understand the findings affecting the jurisdictions in which they operate and assess whether the same weaknesses appear within their institutions.

Where MONEYVAL identifies poor-quality reporting, firms should examine whether their suspicious-transaction reports provide actionable intelligence. Where it identifies weak beneficial ownership, institutions should test whether their customer records identify real control rather than reproduce registry data.

Where asset recovery is ineffective, firms should evaluate whether records can be retrieved quickly enough to support freezing and tracing requests. Where non-financial sectors remain weakly supervised, banks should consider the risk introduced by professional intermediaries and client accounts.

The central lesson from Warsaw is that formal compliance is not the end state.

The strongest AML systems are those that convert risk understanding into detection, detection into intelligence, intelligence into investigation and investigation into the permanent removal of criminal value.

MONEYVAL’s sixth round will test whether European jurisdictions can complete that cycle. Financial institutions will be judged by the same practical question: not simply whether controls exist, but whether they demonstrably prevent, detect and disrupt illicit finance.

What Financial Institutions Should Consider

• Prepare for Greater Regulatory Focus on AML Effectiveness
• Strengthen Enterprise-Wide AML/CFT Risk Assessments
• Improve Suspicious Transaction Detection and Reporting
• Strengthen Terrorist Financing Controls
• Incorporate Proliferation Financing Risk Into Compliance Frameworks
• Improve Beneficial Ownership Verification
• Strengthen Customer and Enhanced Due Diligence
• Improve Asset-Tracing and Financial Investigation Capabilities
• Enhance Cross-Border Transaction Monitoring
• Strengthen Controls Around Organised Crime Predicate Offences
• Integrate Fraud, Corruption and Cybercrime Intelligence Into AML Monitoring
• Improve Information Sharing With Competent Authorities
• Maintain Strong Data Quality and Record-Keeping
• Review Control Effectiveness Rather Than Alert Volumes Alone
• Conduct Regular AML Control Testing and Assurance
• Monitor MONEYVAL Mutual Evaluation Findings
• Prepare for Increasing Supervisory Scrutiny Under the Sixth Evaluation Round
• Align AML Programmes With FATF and MONEYVAL Effectiveness Expectations

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From AML Rules to Real Results: MONEYVAL’s Push for More Effective Financial Crime Enforcement