The European Commission presented yesterday a package of four legislative proposals to strengthen the European Union’s (EU’s) anti-money laundering and counter financing of terrorism (AML/CFT) rules.
The package includes a proposal for the creation of a new EU authority to fight money laundering, new AML/CFT regulations with a focus on customer due diligence and beneficial ownership, rules to make crypto-assets traceable and a new sixth directive on AML/CFT.
Traders in precious stones and metals, works of art, and businesses storing, trading or acting as intermediaries in works of art in free zones or customs warehouses are listed as obliged entities in the new AML/CFT regulations (Trade-based Financial Crime, 21 July 2021, Traders in art, precious stones and metals in focus in new EU AML/CFT package).
The aim of the 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.
The commission says its new measures greatly enhance the EU’s existing AML/CFT framework by taking into account new and emerging challenges linked to technological innovation.
These include virtual currencies, more integrated financial flows in the European single market and the global nature of terrorist organisations.
New EU authority
At the heart of commission’s package of four legislative proposals is the creation of a new EU authority that aims to transform AML/CFT supervision in the EU and enhance cooperation among financial intelligence units.
The new EU AML Authority (AMLA) will be the central authority coordinating national authorities to ensure the private sector correctly and consistently applies EU rules.
A new regulation on AML/CFT will contain directly applicable rules in many areas, with a particular focus on customer due diligence and beneficial ownership for all obliged entities.
The 6th Directive on AML/CFT (AMLD 6) will replace the existing directive containing provisions that will be transposed into national law, such as rules on national supervisors and financial intelligence units in EU member states.
A revision of the 2015 Regulation on Transfers of Funds will make it possible to trace transfers of crypto-assets and limit large cash payments.
The legislative package will be discussed by the European Parliament and Council. The commission says it is hopeful for a speedy legislative process.
AMLA should be operational in 2024 and will start the work of direct supervision slightly later, once the directive has been transposed and the new rules start to apply.
More information on the European Commission’s package and links to texts of the four legislative proposals can be found here.
Categories: Trade Based Financial crimes News