In July 2021, the European Commission introduced a set of legislative proposals aimed at enhancing the European Union's anti-money laundering and counter-financing of terrorism (AML/CFT) regulations.
In March 2023, Members of the European Parliament (MEPs) expressed their support for these proposals, which include the adoption of three key legislative measures:
- The EU Single Rule Book
- The 6th AML Directive
- The regulation that established the EU Anti-Money Laundering Authority (AMLA)
The discussion on this new package of regulations took place during the April 2023 plenary session. Following a lack of objections, negotiations with the council began to finalize the legislation.
What is the status of AMLA to date?
In September 2023, a call for applications was issued to member states to determine the location of AMLA. The co-legislators agreed on several criteria for selection:
- The timeframe for AMLA to become operational on-site after the Regulation's enactment.
- Accessibility of the chosen location.
- The availability of suitable educational facilities for the children of AMLA's staff.
- Appropriate access to the labor market, social security, and medical care for both children and spouses.
- Geographical balance.
Each member state is permitted to submit a single application to host AMLA, and the deadline for applications is Friday, November 10, 2023, at 18:00. All information will be made available online. Several countries, including Germany, Ireland, France, Spain, Italy, Latvia, Lithuania, Austria, Luxembourg, and Belgium, are already in the running to host AMLA that is anticipated to to be in operation in early 2024, fully staffed by 2025, and commence direct supervision of financial institutions in 2026 .
Background information concerning the aforementioned legislative package
- The EU Single Rulebook
Incorporates regulations pertaining to various aspects such as customer due diligence, transparency of beneficial owners, the utilization of anonymous instruments like cryptocurrencies, the emergence of new entities like crowdfunding platforms, and even regulations related to golden passport visas. In terms of preventing money laundering and countering the financing of terrorism (ML/CFT), as outlined in the package, several entities such as banks, asset and cryptocurrency managers, real and virtual estate agents, as well as high-level professional football clubs, are mandated to verify their customers' identities, their assets, and the individuals controlling their companies. MEPs have proposed payment caps, allowing individuals providing goods or services to accept payments up to €7,000 in cash and €10,000 for cryptocurrency transfers
- The 6th Anti- Money Laundering
Includes provisions related to national regulations and financial intelligence units. It also addresses access for competent authorities to essential and dependable information, such as records of beneficial ownership and assets located in free zones. MEPs are advocating for member states to compile data regarding the ownership of high-value assets like yachts, planes, and cars with a value exceeding €200,000, as well as assets held in free zones. Additionally, MEPs have reached a consensus that "beneficial ownership" involves having at least 15% in shares or voting rights, or maintaining other forms of direct or indirect ownership interest. This criterion is extended to 5% plus one share for companies in the extractive industry or those exposed to a heightened risk of money laundering or terrorist financing.
Data regarding beneficial ownership, stored within national registries, must be accessible in digital format, presented in English, and encompass historical data. This information should be accessible to Financial Intelligence Units (FIUs), the European Anti Money Laundering Authority (AMLA), competent authorities, self-regulatory bodies, and obligated entities. Failure to provide accurate information will result in sanctions.
In light of the recent Court of Justice ruling, MEPs have determined that individuals with reasonable interest, such as journalists, reporters, other media professionals, civil society organizations, and higher education institutions, should have the ability to access the register, including the interconnected central registers. This access will be granted for a period of two and a half years. Member states will automatically renew or revoke access based on its proper or improper use.
- AMLA – The new EU Authority
The European Anti Money Laundering Authority (AMLA) will be established with the authority to supervise and investigate to ensure adherence to AML/CFT requirements.The responsibilities of AMLA will include the direct supervision of specific chosen entities within the financial sector, indirect oversight of both financial and non-financial sector entities through regulatory bodies or supervisors, and facilitating coordination and support for the EU's financial intelligence units. Additionally AMLA will possess the authority to enforce penalties ranging from €500,000 - €2 million for significant violations and up to 10% of the obligated entity's annual revenue.
It would appear evident that the introduction of the EU's new legislative package represents a significant step in combatting a broad scope of financial crimes. Furthermore, the establishment of AMLA represents a pivotal milestone, one poised to play a vital role in ensuring adherence with AML/CFT protocols by setting clear expectations, ensuring uniformity, and standardizing requirements across all member states.
"News european parliament 28/03/2023" https://www.europarl.europa.eu/news/en/press-room/20230327IPR78511/new-eu-measures-against-money-laundering-and-terrorist-financing
" News european Parliament 19/04/2023" https://www.europarl.europa.eu/news/en/press-room/20230414IPR80123/stopping-the-flow-of-dirty-money-parliament-ready-for-negotiations
" European Commision " https://commission.europa.eu/law/selection-seat-anti-money-launderingcountering-financing-terrorism-authority-amla_en#background
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