European authorities question Bank of Portugal concerning Isabel dos Santos' investments in Portugal
Brussels, 27 January 2017 - The European Banking Authority (EBA) questioned the Bank of Portugal concerning the supervision and scrutiny of investments in Portugal made by Ms. Isabel dos Santos, daughter of the Angolan President José Eduardo dos Santos. In a letter dated 16 December 2016, the EBA confirms to the Members of the Intergroup on Integrity, Transparency, Corruption and Organised Crime that it has conducted an evaluation of the banking supervisory model made by the Bank of Portugal.
In October 2015 the four Members of the European Parliament sent letters to the European Commission, the European Banking Authority (EBA), the Financial Action Taskforce (FATF) and addressed a written question to the European Central Bank (ECB), requesting an investigation concerning the legality of Ms. Isabel dos Santos' purchase of company EFACEC. They also requested an evaluation to the Portuguese supervision authorities on their compliance of the European regulations of anti-money laundering, bearing in mind the large investments of Ms. Isabel dos Santos, including in the banking sector.
In April 2016 MEP Ana Gomes sent one other document to the European authorities containing further information on the origin of Ms. Isabel dos Santos' wealth - facts which, according to MEP Ana Gomes, indicate a systematic lack of compliance with European regulation on anti-money laundering and terrorist financing, and the apparent lack of action from the supervisory authorities.
According to EU regulations, obliged entities, namely the financing institutions involved in the operation, have the legal duty to perform enhanced due diligence on any operation involving Politically Exposed Persons (PEP) - meaning the duty to establish the origin of the funds of foreign PEPs, to establish how he/she acquired the wealth in general, or for the particular transaction. On the other hand, it is the duty of the Bank of Portugal, as the banking supervisory entity, to certify that the shareholders and members of the board of directors of the credit and financial entities are fit and proper.
The EBA informs that deficiencies in Portugal restricted the ability of the Bank of Portugal to take into account the full range of sources of information considered necessary, limiting its ability to oppose acquisitions to cases where there are findings against individuals concerning their reputation, knowledge, skills and experience. According to the EBA, these deficiencies are being addressed in the Portuguese law transposing the IV Directive on Anti-Money Laundering.
While the EBA will not open an investigation into a breach of Union law, it has demanded a series of measures to be undertaken by the Bank of Portugal in order to guarantee the efficient supervision of the BIC bank, where Ms. Isabel dos Santos is still a shareholder. With regards to bank BPI, the EBA specifies that the ongoing takeover of that bank by another credit institution will suppress the qualifying holding position of Ms. Isabel dos Santos.
The EBA considers that this case shows the need to strengthen the instruments for the control of qualifying holdings in credit institutions and the powers of supervisors. Measures which the EBA recommends exploring include providing for approval of shareholders subject to certain conditions, and providing for voting rights to be suspended if the conditions are not met.
The investigation into this case by the European Commission is still ongoing.