The European Union’s approach to combating money laundering is fragmented and poorly coordinated, an EU watchdog found on Monday.

Anti-money laundering legislation has been implemented too slowly and unevenly across the bloc, the European Court of Auditors (ECA) found.

“Banks in the European Union have been used for money laundering on large scale – and very often, of money that was originating from outside the EU,” ECA auditor Mihails Kozlovs said at a press briefing.

This posed, he said, “systemic and also in some cases security risks for the union.”

The EU could be losing hundreds of billions of euros, the ECA found.

According to Europol, 10 financial intelligence units in the EU in 2014 signalled suspicious transactions totalling around 178.8 billion euros (213.2 billion dollars) – up from 99.4 billion euros in 2013.

This constitutes, according to Europol, between 0.7 and 1.28 per cent of the EU annual gross domestic product (GDP).

But instead of a unified and effective response to money laundering, efforts to combat the crime remained fragmented, according to the ECA.

It seemed that money launderers, Kozlovs said, were “somewhat ahead” of the EU institutions’ supervisory activities.

The auditors criticized for example that there was no system for the European Commission to ask the European banking authority – tasked with investigating breaches of EU law related to money laundering – to scrutinize a certain issue. It had only done so on an ad-hoc basis, mainly following media reports, the auditors found.

“We found shortcomings in how the European banking authority dealt with the complaints it received from the European Commission,” the auditors found. “But more fundamentally, we question the effectiveness of the process, and if it has delivered the expected outcome at all.”