European Commission overhauls anti-money laundering and countering the financing of terrorism rules
The European Commission has presented on 21 July 2021 an ambitious package of legislative proposals to strengthen the EU's anti-money laundering and countering terrorism financing (AML/CFT) rules. The package also includes the proposal for the creation of a new EU authority to fight money laundering.
This package is part of the Commission's commitment to protect EU citizens and the EU's financial system from money laundering and terrorist financing. The aim of this 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. As recalled in the EU's Security Union Strategy for 2020-2025, enhancing the EU's framework for anti-money laundering and countering terrorist financing will also help to protect Europeans from terrorism and organised crime.
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.
The package consists of four legislative proposals:
- 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. The Commission looks forward to a speedy legislative process. The future AML Authority should be operational in 2024 and will start its work of direct supervision slightly later, once the Directive has been transposed and the new regulatory framework starts to apply.
In addition to the new legislative package, the European Commission also issued consultations on the new AML package and the related rules that need to be updated. In the “Have Your Say” consultation portal, the EC has put forward the following consultations:
- Revision of EU rules on Anti-Money Laundering (recast of a former instrument) (Banking and financial services - Proposal for a Regulation)
- Revision of EU rules on Anti-Money Laundering (recast) (Banking and financial services - Proposal for a Directive)
- Revision of EU rules on Anti-Money Laundering (new instrument) (Banking and financial services - Proposal for a Regulation)
- EU Anti-money laundering supervisor (Banking and financial services - Proposal for a Regulation)
FEBIS regulatory Committee will work on this to assess the importance of draft regulations and consultations and the links it has with the business information sector.