The new AML/CFT Package has been approved by the European Parliament on 24th April and adopted by the Council of the European Union on 30th May. The new AML/CFT Package creates harmonized EU rules for subject persons and seeks to ensure consistent application and better enforcement of such rules.
Key Components of the EU AML/CFT Package
The package comprises the following legal acts:
- Regulation on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (AML/CFT Regulation)
- 6th AML/CFT Directive on the mechanisms to be put in place by Member States for the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, repealing Directive (EU) 2015/849
- Regulation establishing the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA Regulation)
- Regulation on information accompanying transfer of funds and certain crypto-assets (recast) (Transfer of Funds Regulation recast)
AML/CFT Regulation
The AML Regulation provides for a directly applicable regulatory framework for obliged entities. The definition of ‘obliged entities’ was extended to encompass several other entities, including crypto-asset service providers; traders in luxury goods; and professional football clubs and agents. Moreover, Enhanced Due Diligence shall be conducted with respect to occasional transactions or business relationships which involve high-risk third countries that pose a threat to the financial system of the EU. The AML Regulation further provides that cash payments shall be limited to a maximum of €10,000 or to a lower maximum determined by Member States themselves. The provisions on beneficial ownership information included within the AML Regulation enhance those currently included within the EU AML/CFT legislation, including the obligation for all legal entities to acquire and maintain correct and up-to-date beneficial ownership information.
6th AML/CFT Directive
The 6th AML/CFT Directive seeks to ensure that Financial Intelligence Units (FIUs) will have greater power to evaluate and detect ML/FT cases by sharing information with each other and with competent authorities. The Directive clarifies the minimum information that FIUs should be able to access, highlighting that Member States shall ensure that FIUs exchange any information which may be relevant for the processing or evaluation of information regarding ML/FT offences. Provisions regarding beneficial ownership registers highlight that access to such registers shall be granted to all those who have a legitimate interest, including journalists and civil society organisations. The Directive further provides that Member States shall make real estate information accessible from an electronic single access point. Information from centralized bank account registers, including information on who has which bank account and where, shall also be accessible through a single access point. In view of this, the Council adopted a separate directive amending Directive (EU) 2019/1153, to ascertain that national law enforcement authorities will have access to such registers through the single access point and to introduce the harmonisation of bank statement format.
Establishment of AMLA and Transfer of Funds Regulation Recast
The new AML/CFT legislative framework provides for the establishment of an Anti-Money Laundering Authority (AMLA) which will be responsible for AML/CFT supervision. This Authority, will directly supervise the riskiest credit and financial institutions of the EU; coordinate FIUs in member states; support the non-financial sector; and impose pecuniary sanctions in case of serious violations. On the other hand, the amendments to the Transfer of Funds Regulation Recast will extend Regulation 2015/847 to include transfers of crypto-assets made by Crypto-Asset Service Providers (CASPs).
These legal acts will soon be published in the Official Journal of the EU and enter into force, marking a significant step towards a more robust EU-wide AML/CFT framework.
Anti-money laundering: Council adopts package of rules – Consilium (europa.eu)
FAQs
Who is considered as a ‘trader in luxury goods’?
Traders in luxury goods include traders in precious metals, stones and jewellery; and traders in luxury cars, airplanes and yachts.
Where will AMLA be based?
AMLA will be based in Frankfurt and will start operating in mid-2025.
When will the AML Regulation and the 6th AML/CFT Directive become applicable?
The AML Regulation will become applicable three years after the entry into force. Certain sections of the 6th AML directive shall be transposed into national law by Member States within two years, whereas other sections shall be transposed within three years.
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