Economic and Financial Affairs Council, 02/10/2018, 2 October 2018

Main results

The Commission presented its proposal to strengthen the role of the European Banking Authority (EBA) in supervising EU financial institutions, so as to better address money laundering and terrorist financing threats.

The fight against money laundering is an integral part of our effort to reduce risks in the financial sector and to bring back confidence in our financial system. The EU has carried out ambitious reforms but we now need to make sure that they are enforced and monitored effectively across the EU. Hartwig Löger, minister for finance of Austria which currently holds the presidency of the Council

Ministers stressed the importance of proper implementation of EU rules on anti-money laundering and enhancing cooperation between anti-money laundering and prudential supervisors so as to create an efficient monitoring framework. 

The Council also adopted a regulation tightening controls on cash entering or leaving the Union, thereby bringing EU legislation in line with the highest international standards on combating money laundering and terrorism financing.

• Fight against money laundering and terrorist financing (background information)

Indirect taxation 

The Council reached political agreement on three VAT-related proposals:

• the "e-publication" regulation: it will allow member states to apply non-standard VAT rates to electronic publications and potentially align VAT rules between physical and electronic forms for publications. This file is part of the EU's wider efforts to modernise value added tax for the digital economy in the context of the EU's digital single market strategy.

• Electronic publications: Council agrees to allow reduced VAT rates (press release, 02/10/2018)

• the "generalised reverse charge mechanism": it will allow member states that are most severely affected by VAT fraud to apply temporarily a generalised reversal of VAT liability, thus providing a solution for member states that face endemic carousel fraud. Member states will only be able to use the generalised reverse charge mechanism for domestic supplies of goods and services above a threshold of €17 500 per transaction, and only up to 30 June 2022, and under very strict technical conditions.

• VAT fraud: Council agrees to allow generalised, temporary reversal of liability (press release, 02/10/2018)

• the VAT quick-fixes, aimed at introducing adjustments to the EU's VAT rules in order to fix specific issues (call-off stock, VAT identification number, chain transactions, proof of intra-EU supply) pending the introduction of a new VAT system.

• VAT: Council agrees short-term fixes, pending overhaul (press release, 02/10/2018)

The Council also adopted measures to strengthen administrative cooperation in order to tackle more effectively the most widespread forms of cross-border fraud.

• Controls on cash entering and leaving the EU: Council adopts regulation (press release, 02/10/2018)

In addition, ministers finalised preparations ahead of international meetings (G20 finance meeting of 11-12 October and IMF annual meetings on 12-14 October in Bali). They also discussed the 'European Semester' policy monitoring process in the light of lessons learned from the 2018 exercise.

• European Semester in 2018 (background information)
• G20 meetings