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EU's anti-money laundering crackdown sparks backlash over privacy risks and discrimination

Banks are shutting accounts and profiling customers under the EU's latest financial surveillance push. Could these measures do more harm than good?

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1 min read
The image shows a group of police officers standing in front of a large building with windows,...
The image shows a group of police officers standing in front of a large building with windows, pillars and arches. There are vehicles on the road and a person holding a camera on the left side of the image. In the background, there are trees, traffic signals with poles, flags with poles and a clear blue sky. This image is likely related to the recent news that the German government has announced that the EU will not be allowed to enter the country.

EU's anti-money laundering crackdown sparks backlash over privacy risks and discrimination

The EU’s latest measures against money laundering and terrorist financing are facing sharp criticism from civil rights groups. They warn that the new rules threaten financial privacy and risk violating fundamental rights. Banks are already closing accounts or denying services to customers deemed statistically risky, including migrants and families of politicians.

In 2024, the EU adopted an updated anti-money laundering (AML) package that forces banks to gather even more personal and financial data from customers. Legal scholar Carolin Kaiser had earlier criticised a 2017 amendment to the AML directive, arguing it enabled indiscriminate data retention and personality profiling. Under the new rules, payment transactions could face near-total surveillance.

The EU has shifted much of the responsibility for detecting financial crimes from public authorities to private businesses. Banks, accountants, and crypto wallet providers must now flag suspicious activity. This has led to widespread 'de-risking', where institutions preemptively cut ties with customers in high-risk categories. ING Bank has already apologised for discriminatory profiling, showing how these policies affect real people. Beneficial ownership registers will also expand, making sensitive details about company and nonprofit controllers more accessible. Privacy First argues that the measures go far beyond what law enforcement needs. They claim the rules create a chilling effect, discouraging people from joining social or civic initiatives.

The EU’s push for stricter financial monitoring has already led to banks closing accounts and profiling customers. With the 2024 AML package, data collection will grow, and more personal information will become available to authorities. Critics say the balance between security and privacy has tipped too far, leaving fundamental rights at risk.

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