This article is based on the AML Regulation Factsheet by Accountancy Europe, which outlines the latest changes introduced by the European Union's Anti-Money Laundering (AML) reform. It highlights the key compliance obligations for accountants, auditors, tax advisors, and other obliged entities, providing insights into how these changes will impact their operations and what steps they must take to prepare.
The European Union's fight against money laundering and terrorist financing has taken a significant step forward with the adoption of a new AML package in May 2024. This reform introduces stricter compliance requirements for accountants, auditors, tax advisors, and other "obliged entities," significantly impacting their day-to-day operations. The AML Regulation (AMLR) is directly applicable across all EU member states, ensuring a harmonised approach to AML compliance. Unlike previous directives that required national implementation, the AMLR eliminates variations in enforcement, creating a level playing field across the region.
One of the most notable changes is the enhanced requirements for internal policies, procedures, and controls. Obliged entities must conduct comprehensive business-wide risk assessments and establish robust compliance functions, including appointing a compliance manager and compliance officer. Regular training and periodic assessments of employees involved in AML activities are also mandated. These measures aim to strengthen AML frameworks by ensuring that organisations proactively identify and mitigate risks.
Customer due diligence (CDD) has also undergone significant changes. The threshold for applying CDD to occasional transactions has been lowered from €15,000 to €10,000, with additional scrutiny required for cash transactions above €3,000. Obliged entities must verify customers' identities before establishing a business relationship and conduct ongoing monitoring to detect suspicious activity. Enhanced due diligence (EDD) is required for higher-risk customers, including politically exposed persons (PEPs), their family members, and close associates. These measures ensure that financial crime risks are continuously assessed and managed throughout the customer lifecycle.
Transparency regarding beneficial ownership has been reinforced under the new regulation. Companies must accurately identify and verify beneficial owners who hold at least a 25% ownership stake or exert control through other means. Any discrepancies between an entity's records and central beneficial ownership registers must be reported within 14 days. This change aims to prevent the misuse of legal entities for illicit purposes and improve accountability in corporate structures.
The reporting obligations for suspicious activity have also been strengthened. Obliged entities must promptly report any suspected money laundering or terrorist financing to Financial Intelligence Units. The new framework also introduces clearer guidelines for information sharing within partnerships, ensuring better coordination among compliance professionals. To support these efforts, the new AML Authority (AMLA) will develop technical standards and provide additional guidance to ensure consistent application across the EU.
With these changes set to take effect by July 2027, organisations must begin preparing now. Updating internal policies, enhancing compliance functions, and ensuring employees receive proper training will be crucial steps in adapting to the new regulatory landscape. By taking proactive measures, obliged entities can not only meet compliance requirements but also contribute to the broader effort of safeguarding the integrity of the financial system.
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.
