The European Union has taken a major step towards strengthening its rules on Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT). On 18 January 2024, the Council and the Parliament reached a provisional agreement on two main elements of the package:
- a new regulation ("AMLR") on AML/CFT that will harmonise rules for all obliged entities; and
- a 6th Money Laundering Directive ("AMLD6") that will deal with the organisation of institutional AML/CFT systems at national level in the member states.
Key changes introduced by the AML/CFT single rulebook
- An extended list of obliged entities: Crypto-asset service providers, traders of luxury goods, dealers in high-value vehicles, airplanes, and yachts, traders of cultural goods (i.e. artworks), and professional football clubs and agents will now be subject to AML/CFT obligations.
- Enhanced Due Diligence: Specific enhanced due diligence measures for cross-border correspondent relationships for crypto-asset service providers, business relationships with high net-worth individuals and those involving high-risk third countries.
- Cash Payments: An EU-wide limit of €10,000 for cash payments. Obliged entities must also identify and verify a person who carries out an occasional transaction in cash between €3,000 and €10,000.
- Beneficial Ownership: Harmonised rules for identifying beneficial owners, including a 25% ownership threshold and improved rules for multi-layered and complex ownership and control structures.
The texts will now be finalised and submitted to member states' representatives for approval before they formally enter into force. Whilst the changes are not applicable as of yet, subject persons are nonetheless advised to familiarise themselves with the proposed changes accordingly.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
