Mairead McGuinness – Photo © European Union 2021
(BRUSSELS) – The EU Commission proposed Monday a new authority to combat money laundering, part of a package of measures to strengthen Europe’s fight against money laundering and countering terrorism financing.
The aim of the package is to improve the detection of suspicious transactions and activities, and to close loopholes used by criminals to launder illicit proceeds or finance terrorist activities through the financial system.
According to the EU executive, money laundering poses a clear threat “to citizens, democratic institutions, and the financial system”. “The scale of the problem cannot be underestimated and the loopholes that criminals can exploit need to be closed,” said financial services Commissioner Mairead McGuinness: “Today’s package significantly ramps up our efforts to stop dirty money being washed through the financial system.”
The measures greatly enhance the existing EU framework by taking into account new and emerging challenges linked to technological innovation. These include virtual currencies, more integrated financial flows in the Single Market and the global nature of terrorist organisations. These proposals will help to create a much more consistent framework to ease compliance for operators subject to AML/CFT rules, especially for those active cross-border.
At the heart of the package is the creation of a new EU Authority which will transform AML/CFT supervision in the EU and enhance cooperation among Financial Intelligence Units (FIUs). The new EU-level Anti-Money Laundering Authority (AMLA) will be the central authority coordinating national authorities to ensure the private sector correctly and consistently applies EU rules. AMLA will also support FIUs to improve their analytical capacity around illicit flows and make financial intelligence a key source for law enforcement agencies.
The Single EU Rulebook for AML/CFT will harmonise AML/CFT rules across the EU, including, for example, more detailed rules on Customer Due Diligence, Beneficial Ownership and the powers and task of supervisors and Financial Intelligence Units (FIUs).
There will be full application of the EU AML/CFT rules to the crypto sector. The reform will extend these rules to the entire crypto sector, obliging all service providers to conduct due diligence on their customers.
Limiting large cash payments makes it harder for criminals to launder dirty money, and the proposal sets an EU-wide limit of EUR 10,000 on large cash payments.
To strentgthen international cooperation, there will be two EU lists, a “black-list” and a “grey-list, reflecting the Financial Action Task Force (FATF) listing. Following the listing, the EU will apply measures proportionate to the risks posed by the country. The EU will also be able to list countries which are not listed by FATF, but which pose a threat to the EU’s financial system based on an autonomous assessment.
These are the four legislative proposals in today’s package:
A Regulation establishing a new EU AML/CFT Authority;
- A Regulation on AML/CFT, containing directly-applicable rules, including in the areas of Customer Due Diligence and Beneficial Ownership;
- A sixth Directive on AML/CFT (“AMLD6”), replacing the existing Directive 2015/849/EU (the fourth AML directive as amended by the fifth AML directive), containing provisions that will be transposed into national law, such as rules on national supervisors and Financial Intelligence Units in Member States;
- A revision of the 2015 Regulation on Transfers of Funds to trace transfers of crypto-assets (Regulation 2015/847/EU).
The legislative package will now be discussed by the European Parliament and Council.
Anti-money laundering and countering the financing of terrorism
Proposal on centralised bank account registeries
Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) - background guide
