New EU rules on money laundering and terrorist financing adopted

On April 24, the European Parliament officially adopted the new Anti-Money Laundering and Countering the Financing of Terrorism legislative package negotiated in the final stretch of this mandate. Pauline Hery, public affairs officer at France générosités, shares the details:

The European Commission’s Action Plan for a comprehensive Union policy on the prevention of money laundering and terrorism financing commits it to taking measures to strengthen EU rules in this area. The action plan is built on six pillars. Under Pillar 2, “Establishing a single EU-wide body of AML/CFT rules”, the Commission proposed the Anti-Money Laundering and Countering the Financing of Terrorism package of laws in July 2021.

Following its adoption by the Economic and Monetary Affairs Committee in March, members of the European Parliament adopted this new package of law on April 24.

This new body of law replaces Directive (EU) 2015/849 (as amended by Directive (EU) 2018/8431).

The Anti-Money Laundering and Countering the Financing of Terrorism package consists of:

• The EU single rulebook regulation – provides rules on customer due diligence, transparency of beneficial owners and the use of anonymous instruments, such as crypto-assets, and new entities such as participatory finance platforms
• The Sixth Anti-Money Laundering directive ­– contains national measures on monitoring and on Financial Intelligence Units, as well as on access by the competent authorities to the necessary information, such as registers of beneficial owners
• The Anti-Money Laundering Authority regulation

It aims to achieve the following main objectives:

– Harmonize and strengthen the rules to fight against money laundering and terrorist financing.

– Improve supervision and cooperation between Financial Intelligence Units.

– Strengthen the European framework for crypto-assets.

Improving access to information on beneficial owners

Article 12 of the Sixth Directive stipulates that people with a legitimate interest, including journalists and media professionals, civil society organisations, competent authorities and supervisory bodies, shall have immediate, unfiltered, direct and free access beneficial ownership information held in national registries and interconnected at EU level.

Strengthening the powers of Financial Intelligence Units

Each Member State must set up a Financial Intelligence Unit responsible for preventing, detecting and effectively combating money laundering and terrorist financing.

Article 18 of the Sixth Directive gives FIUs immediate and direct access to a range of information, including tax data, nonprofit registers and national registers of beneficial owners.

Article 20 of the Directive requires Member States to ensure that FIUs are empowered to suspend or refuse the execution of a transaction when it is suspected of being linked to money laundering or terrorist financing.

The creation of a new EU anti-money laundering authority

Regulation 2021/0240 (COD) establishes a new European authority to combat money laundering and terrorist financing. This new authority will be in Frankfurt and will be responsible for:

– Contributing to the implementation of harmonized rules.

– Directly supervising financial sector entities exposed to the highest risk of money laundering and terrorist financing.

– Facilitating cooperation between national Financial Intelligence Units.

– Monitoring and supporting the implementation of targeted financial sanctions.

Next steps

The texts must now be formally adopted by the Council before their official publication in the EU’s Official Journal.

Picture by Ibrahim Boran on Unsplash