Article 4 min

EU Moving Forward With Anti-Money Laundering Authority and Single Rulebook

AMLA - Anti-Money Laundering Authority

June 5, 2024  

The EU is advancing new Anti-Money Laundering (AML) initiatives that can help obliged entities better apply safeguards to defend against criminal activity.

The EU is establishing the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA) to supervise financial sector entities at high risk of money laundering, support cross-border case analyses and develop technical and regulatory standards. The AMLA also will maintain a central database tied to AML supervision.

The EU also has developed a single AML rulebook (AMLR) and has updated the sixth AML Directive (6AMLD). The new authority and additional changes are part of an AML package awaiting final approval.

Goals for the AMLA

The EU has strong AML standards, with many member states ranking among the lowest in money laundering risk. However, each member state has its own interpretation of EU directives and its own independent financial intelligence unit (FIU), which could allow money launderers to exploit diverging national approaches to avoid detection.

The AMLA is designed as a decentralized EU agency responsible for supervisory and advisory functions. The authority can add a consistent thread through EU AML rules to close loopholes, clarify guidelines for national supervisors and FIUs, and strengthen the exchange of information.

The AMLA will directly supervise select high-risk obliged entities. Each member state will have at least one entity under AMLA supervision. 

The AMLA will be based in Frankfurt, Germany, and will have more than 400 staff members. The authority is set to begin operations in mid-2025.

A Snapshot of the Single AML Rulebook Requirements

EU AML directives set baseline rules that member states implement through national legislation. The AMLR will change that practice by establishing in-depth requirements to be applied throughout the EU.

Extended Scope of Obliged Entities

AML requirements will apply to more business types, including crypto-asset service providers (CASPs), traders of luxury or cultural goods, and professional football clubs and agents.

Enhanced Due Diligence Obligations for Specific Transactions

Enhanced due diligence will apply to CASPs involved in cross-border relationships, credit and financial institutions involved in relationships with high net-worth individuals, and all obliged entities transacting with high-risk countries.

Cash Payment Limits and Controls

The AMLR will set a €10,000 limit for cash payments, with member states able to impose a lower threshold. People who conduct occasional cash transactions between €3,000 and €10,000 will require identity verification.

Stronger Beneficial Ownership Regulations

The AMLR will lay out rules regarding beneficial owner identification and registration. The rulebook will:

  • Establish a beneficial ownership threshold at 25% of shares, voting rights or other ownership interests
  • Clarify the definition of a beneficial owner
  • Implement rules for identifying beneficial owners in complex, multilayered ownership and control structures
  • Mandate beneficial ownership registration for non-EU entities conducting activities or purchasing real estate in the EU
  • Update data protection and document retention provisions to allow authorities access to beneficial ownership information held by obliged entities
  • Require obliged entities to regularly review beneficial ownership information and report any discrepancy with central beneficial ownership registers

“The result is a historic win in the fight against money laundering and terrorist financing,” said Eero Heinäluoma, lead member of the European Parliament on behalf of the Economic and Monetary Affairs Committee. “Until today, the member states lost billions of euro. Stricter anti-money laundering rules for cryptocurrencies, banks, trusts, oligarchs and football were long overdue. One EU-harmonized framework will close national loopholes.”

6AMLD Updates

The 6AMLD will receive several updates.

Reinforced Beneficial Ownership Register Rules

To ensure the reliability of beneficial ownership registers, authorities must: 

  • Verify the accuracy of information submitted to central registers
  • Screen entities associated with financial sanctions 
  • Let registers carry out on-site inspections
  • Give registry access to public authorities, obliged entities and people with a legitimate interest 

Registers will have to hold information for up to 10 years, plus an additional five years when there is an ongoing criminal investigation. 

Easier Access to Real Estate Registers for Criminal Investigations

Authorities will gain easier access to real estate registers through a single access point to investigate criminal schemes.

Strengthened FIUs

FIUs will have easier access to financial, administrative and law enforcement authorities. 

Confirmed Relevance of Risk Assessments

EU and member state-level risk assessments will be required under 6AMLD. Member states will commit to mitigating the risks they identify.

The 6AMLD can issue heavy penalties for noncompliance. That places greater emphasis on organizations identifying risks and mitigating them.

Harmonizing AML Compliance Processes

The full EU AML package could take more than three years for implementation. But the AMLA could begin identifying obliged entities for direct supervision.

No matter when the full package is in full force, organizations can take steps now to position themselves to comply with the new EU AML framework.

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