Traders in precious stones and metals, works of art, and businesses storing, trading or acting as intermediaries in the trade of works of art in free zones or customs warehouses are specifically contemplated in proposals disclosed yesterday by the European Commission 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 (Trade-based Financial Crime, 21 July 2021, New EU AML Authority centrepiece in European Commission’s ambitious new AML/CFT proposals).
Traders at risk
The new AML/CFT regulation recognises that some categories of traders in goods are particularly exposed to money laundering and terrorist financing risks due to the high value that the small, transportable goods they deal with contain.
For this reason, traders dealing in precious metals and stones should be subject to AML/CFT requirements the commission says. They are listed as entities obliged to comply with the requirements of the new regulation.
Art trade and free zones
Traders in works of art are also included in the list of obliged entities in the new regulation.
Businesses storing, trading or acting as intermediaries in the trade of works of art when this is carried out within free zones and customs warehouses are included in the list too.
Higher risk transactions
The new regulation emphasises the importance of customer due diligence on obliged entities and also lists transactions categorised as higher risk.
Transactions related to oil, arms, precious metals, tobacco products, cultural artefacts and other items of archaeological, historical, cultural and religious importance, or of rare scientific value, as well as ivory and protected species are considered potentially higher risk in the regulation.
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