In a special report on the subject released on Monday, the ECA said that although the value of suspicious transactions within the EU is estimated to be hundreds of billions of euros, its approach to counter it was fragmented, adding that the bloc needed a stronger oversight framework for combating money laundering,reports Xinhua news agency.
Although the relevant EU bodies have a policymaking and coordinating role and limited direct powers, efforts are largely managed at the national level.
The special report from the ECA concludes that EU-level action to combat money laundering and terrorist financing has weaknesses, and that the bloc's oversight framework is fragmented and poorly coordinated and thus fails to ensure a coherent approach and a level playing field.
Money laundering is the practice of legitimising the proceeds of crime by filtering them into the regular economy to disguise their illegal origin.
Within Europe, Europol estimates that the value of suspicious transactions is equivalent to about 1.3 per cent of EU's gross domestic product (GDP).
"EU-level weaknesses with regard to money laundering and terrorist financing need to be addressed, and the EU's supervisory role significantly strengthened," said Mihails Kozlovs, a member of the ECA responsible for the report.
"Much more needs to be done to ensure that the EU law is implemented promptly and coherently. For a start, the EU should use regulations in preference to directives wherever possible, given the need for legislation to be implemented coherently at Member State level," Kozlovs added.
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