EU Developing Stringent Measures to Combat Money Laundering: What’s Included?

Representatives of the European Union are nearing an agreement on new laws to combat money laundering, which could impose a ban on significant cash payments and acquiring citizenship through investments.

These new rules, outlined in the EU Directive, will be mandatory for all 27 members. They aim to simplify compliance and enhance the effectiveness of combating international financial flows.

Negotiating parties have already agreed to expand law obligations to art traders, who will also be required to verify their clients’ identities, akin to banking standards.

Additionally, there are plans to prohibit using cash for major transactions, such as real estate purchases. Disagreements exist regarding setting the threshold at €10,000 or lower. Some European Parliament members express concerns about mandatory digital payments, citing issues related to confidentiality and cybersecurity.

Members of the European Parliament also plan to prohibit granting citizenship through investments, believing that such practices foster money laundering and corruption. This stance is supported by the FATF, which, in its November report, labels real estate agents and asset managers supporting these schemes as “criminal, negligent accomplices.”

It is anticipated that the new EU agency to combat money laundering will monitor suspicious financial operations in approximately 40 major banks. Determining the city where the agency’s headquarters will be located is currently underway.

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