The fight against money laundering and terrorist financing is getting a major boost thanks to a new set of rules approved by the Council of the European Union. These measures are designed to protect EU citizens and the financial system from financial crime. Here you can read all about these important developments and what they mean for the future.
Stricter rules
The Council adopted a comprehensive package of new rules that will strengthen our systems in the fight against money laundering and terrorist financing. A new agency in Frankfurt will monitor compliance with these rules. This means that fraudsters, organized crime and terrorists will no longer have room to channel their illicit profits into the financial system.
The regulatory package
On July 20, 2021, the European Commission presented a package of legislative proposals to strengthen EU regulations to combat money laundering and terrorist financing. This package includes:
- An ordinance establishing the AMLA, authorized to impose penalties and fines.
- A regulation to make remittances, including crypto assets, more transparent and traceable.
- A regulation on anti-money laundering obligations for the private sector.
- A directive on national anti-money laundering mechanisms.
On Nov. 25, 2021, the Commission also submitted a proposal for a central access point directive.
A unified approach
The new rule package brings together all existing private sector rules into one directly applicable regulation. This ensures uniformity across the EU, so fraudsters can no longer find loopholes in different national systems. Minister Vincent Van Peteghem of Belgium stresses the importance of this step in effectively fighting financial crime.
Moreover, the rules are extended to new entities subject to reporting requirements such as crypto traders, luxury goods dealers and soccer clubs. Stricter requirements for customer due diligence and beneficial owners of financial transactions will be imposed. Cash payments will be limited to €10,000, further increasing transparency.
A better organized anti-money laundering system
The directive in the package improves the organization of national anti-money laundering systems. This includes clear rules for cooperation between financial intelligence units (FIUs) and supervisors. The new AMLA will have both direct and indirect supervisory powers over high-risk entities in the financial sector. This integrated supervisory mechanism will ensure that all reporting entities meet their anti-money laundering and terrorist financing obligations.
In addition, EU member states will make information from central registers of bank accounts available through a central access point. This means that national law enforcement agencies will have access to this information, which is crucial for fighting crimes and detecting and seizing criminal proceeds.
Next steps and implementation
This set of rules marks the final step in the approval process. The text will soon be published in the EU Official Journal and then enter into force. The Anti-Money Laundering Regulation will become applicable three years after its entry into force. Member states have two years to transpose certain parts of the directive and three years for full implementation.
The new AMLA will be based in Frankfurt and will be operational by mid-2025. This new authority will play a key role in making the EU anti-money laundering and terrorist financing framework more efficient through an integrated mechanism with national supervisors.
At SCOPE FinTech Solutions, we are committed to supporting our clients in complying with these new regulations and strengthening their own systems against financial crime. Contact us to learn more about how we can help you comply with the new EU regulations.
Sources:
Raad van de Europese Unie. (2024, mei 30). Witwasbestrijding: Raad keurt pakket regels goed. Consilium. https://www.consilium.europa.eu/nl/press/press-releases/2024/05/30/anti-money-laundering-council-adopts-package-of-rules/
