The European Commission has presenteda new EU package Anti-Money Laundering as legislative proposals. What changes will the new EU rules against money laundering bring? The plan is to create a new EU anti-money laundering authority. These proposals aim to make it easier to detect suspicious transactions and activities and to close the loopholes that criminals use to launder the proceeds of crime through the financial system or to finance terrorist activities.
The proposed measures address the risks arising from technological innovations. These include virtual currencies, more integrated financial flows into the single market and the global nature of terrorist organisations.
The submitted EU package consists of four legislative proposals:
A regulation establishing a new EU anti-money laundering and counter-terrorist financing authority.
A regulation on combating money laundering and terrorist financing with directly applicable provisions –
also for the areas of customer due diligence and beneficial ownership
The Sixth Anti-Money Laundering and Counter-Terrorist Financing Directive, which is intended to replace Directive 2015/849/EU (i.e. the Fourth Anti-Money Laundering Directive as amended by the Fifth Anti-Money Laundering Directive) and contains provisions that need to be transposed into national law, such as the rules on national supervisory authorities and financial intelligence units in the Member States
A revised version of the Money Transfer Regulation 2015 (Regulation 2015/847) to enable the tracing of crypto-transfers.
A key component is the creation of a new authority to transform anti-money laundering and counter-terrorist financing oversight in the EU and improve cooperation between financial intelligence units (FIUs). The new EU anti-money laundering authority will act as a central body to coordinate the work of national authorities to ensure that the private sector applies EU rules correctly and consistently. In addition, according to the EU press release, the new EU AMLA authority will assist FIUs in improving their analytical capacity as regards illicit financial flows and make FIUs an essential source of information for law enforcement authorities.
The new EU package authority will have the following competences:
The new EU anti-money laundering and counter-terrorist financing package will contain more detailed provisions on customer due diligence, the UBO and the powers and duties of supervisors and FIUs.
What changes will the new EU rules against money laundering bring? Existing national bank account registers will be interconnected to give FIUs faster access to information on bank accounts and safe deposit boxes.
The EU Commission notes that only certain categories of crypto service providers are covered by EU anti-money laundering and counter-terrorist financing rules. The EU anti-money laundering package aims to extend these rules to the entire crypto sector and subject all service providers to CDD customer due diligence rules. The changes are designed to ensure that transfers of crypto assets such as Bitcoin are 100% traceable. Anonymous crypto “wallets” will be banned. EU anti-money laundering and anti-terrorist financing rules will thus be fully applicable to the crypto sector.
High cash payments are a good opportunity for criminals to launder money. For this reason, the EU Commission has proposed a cash payment ceiling of €10 000. Such ceilings already exist in about two-thirds of the Member States. However, the amounts vary. This EU-wide limit will limit high cash payments and make it harder for criminals to launder dirty money. In addition, the provision of anonymous crypto “wallets” will be prohibited.
The Financial Action Task Force (FATF) issues global country recommendations. If a country is listed by the FATF, this classification is adopted by the EU. In future, there will be two EU lists corresponding to the FATF classification:
a “black” list and a “grey” list.
According to this classification, the EU will take measures appropriate to the risks of the country concerned. The EU will also be able to add non-FATF-listed countries to its lists if its own assessment shows that they pose a threat to the EU financial system.