European governments need to step up their efforts to combat money laundering and terrorist financing because their current capabilities are below par, according to a report by Europe’s main human rights body.

They also need to adopt stricter regulation and better supervision of fintechs; crypto firms; and advisers such as lawyers, accountants, and tax specialists who might facilitate money laundering, said the Council of Europe’s anti-money laundering/countering the financing of terrorism body (AML/CFT), Moneyval.

In its report for 2021, released Wednesday, Moneyval said the 34 jurisdictions subject to its monitoring as of Dec. 31 continue on average to demonstrate only a “moderate” level of effectiveness in their AML/CFT attempts. As a result, the report said, compliance is “below the satisfactory threshold.”

Moneyval said AML efforts remain “particularly weak” in financial sector supervision, private sector compliance, transparency of legal persons, money laundering convictions and confiscations, financial sanctions for terrorism, and proliferation of weapons of mass destruction.

No country was awarded a high effectiveness rating for private sector supervision, typically the result of a lack of resources.

Few countries have adequate beneficial ownership registers to determine who actually owns a company, and those that do mostly do not have efficient mechanisms to verify the information contained in them, according to Moneyval.

In almost 90 percent of assessed countries, the report highlighted the absence of in-depth assessment of certain specific risks, such as terrorism financing and offshore money laundering, which meant a risk-based approach to make the best use of resources and focus was more difficult to achieve.

The report also acknowledged poor enforcement and investigation records. In many cases, sanctions against private sector entities are either not proportionate, dissuasive, or effective. Adequate measures to freeze or even identify terrorism financing funds, for example, are often not taken. Consequently, companies and adviser firms see no incentive not to continue as usual.

Moneyval said, “In at least seven countries, enhancing the powers and resources of the countries’ asset recovery and management offices will be crucial to improving their effectiveness” in tackling the flow of dirty money.

Eight countries were given a low rating for their money laundering conviction rates, and 12 countries were found not to follow up parallel money laundering investigations for financial crime cases because “money laundering is mostly treated as a consequence of the underlying criminal activity.” Some 13 countries seemingly do not conduct terrorism financing investigations.

More positively, Moneyval said its members—which include several European Union member states; U.K. tax havens such as Jersey and Guernsey; and EU neighbor countries such as Georgia, Armenia, Ukraine, and Israel—demonstrate the best results in the areas of risk assessment, international cooperation, and use of financial intelligence. The field of international cooperation remains the only area where average compliance is above the satisfactory threshold across its membership.