Regulation Name: AML Package of Rules
Publishing Date: 30 May 2024
Region:  European Union
Agency: European Council

On May 30, 2024, the European Union took a significant step to bolster its defenses against money laundering and terrorist financing by adopting a comprehensive package of anti-money laundering (AML) rules. This ambitious legislative move aims to protect EU citizens and the financial system by closing existing loopholes and creating a more unified and robust framework.

Harmonized Rules Across the EU

A key element of the new package is the harmonization of AML rules throughout the EU, marking the first time such comprehensive regulations have been uniformly applied across member states. By creating a consistent framework, the EU aims to close loopholes that fraudsters have previously exploited. This regulation now extends AML obligations to new sectors, including most of the crypto industry, luxury goods traders, and football clubs. Additionally, it sets stricter due diligence requirements and limits cash payments to EUR 10,000.

Establishment of the European AML Authority (AMLA)

A major highlight of the package is the creation of the European Anti-Money Laundering Authority (AMLA), which will be headquartered in Frankfurt and begin operations in mid-2025. AMLA will have both direct and indirect supervisory powers over high-risk entities in the financial sector and will play a crucial role in coordinating efforts with national supervisors and Financial Intelligence Units (FIUs). AMLA is also empowered to impose sanctions on entities that commit serious, systematic, or repeated breaches of AML regulations.

Enhanced National Cooperation and Supervision

The package includes a directive aimed at improving the organization of national AML systems. This directive sets out clear rules for how FIUs and national supervisors should collaborate to combat money laundering and terrorist financing more effectively. It ensures that FIUs have the necessary tools and information to detect and address suspicious financial activities.

Centralized Bank Account Registers

To further enhance transparency and traceability, the new rules mandate that member states provide access to centralized bank account registers through a single access point. This initiative is designed to facilitate the work of FIUs and national law enforcement authorities, making it easier to trace and confiscate the proceeds of crime. Additionally, the directive harmonizes the format of bank statements across the EU, which will streamline the process of financial investigations.

Next Steps

With the adoption procedure now complete, the texts will be published in the EU’s Official Journal and will enter into force. The AML regulation will apply three years after its entry into force, while member states have two to three years to transpose the various parts of the AML directive into national law.

Background

This legislative package follows a proposal by the European Commission on July 20, 2021, aimed at strengthening the EU’s AML and Countering the Financing of Terrorism (CFT) framework. It also builds on previous regulations to make transfers of crypto-assets more transparent and traceable, reflecting the EU’s ongoing commitment to fighting financial crime in an increasingly digital world.

By adopting this comprehensive package, the EU reinforces its commitment to maintaining the integrity of its financial system and protecting its citizens from the risks associated with money laundering and terrorist financing.

Read the press release here.