Strengthening Anti-Money Laundering: New Laws by European Parliament

The European Parliament has ushered in a comprehensive set of legislative measures aimed at bolstering the European Union’s capacity to combat money laundering and terrorist financing.

These new laws ensure that individuals with a genuine interest, such as journalists, media practitioners, civil society groups, regulatory authorities, and oversight bodies, will have immediate, unfiltered, and free access to beneficial ownership information stored in national registries, interconnected across the EU. Moreover, these registries will now maintain records spanning back at least five years.

Additionally, the legislation empowers Financial Intelligence Units (FIUs) to conduct more thorough analyses and identify instances of money laundering and terrorist financing, enabling them to suspend suspicious transactions.

The legislative package introduces stringent due diligence procedures and identity verification checks for customers by obligated entities such as banks, asset and crypto managers, and real estate agents. Starting in 2029, major professional football clubs engaged in significant financial dealings with investors or sponsors will also be required to verify customer identities, monitor transactions, and report any dubious activities to FIUs.

Notably, the laws feature heightened scrutiny measures for ultra-high-net-worth individuals (with wealth exceeding EUR 50,000,000, excluding their primary residence), impose an EU-wide cash payment limit of EUR 10,000 (except for non-professional transactions between private individuals), and implement measures to ensure compliance with targeted financial sanctions and prevent circumvention.

To oversee the enforcement of these new regulations, a new authority, the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA), will be established in Frankfurt. AMLA will directly supervise high-risk financial entities, intervene in cases of supervisory lapses, serve as a central coordinating body for supervisors, and resolve disputes among them. It will also oversee the implementation of targeted financial sanctions.

The Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) package comprises the sixth Anti-Money Laundering (AML) directive, the EU “single rulebook” regulation, and the Anti-Money Laundering Authority (AMLA) regulation.

Before becoming law, these measures still require formal adoption by the Council and subsequent publication in the EU’s Official Journal.

Through the enactment of these laws, the European Parliament is heeding the calls of citizens articulated in the outcomes of the Conference on the Future of Europe, particularly addressing Proposal 16(1) and 16(2) regarding the prevention of tax evasion and cooperation on corporate taxation.

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