Financial Crime World

European Union Regulations for Combating Money Laundering and Terrorism Financing

Introduction

The European Union (EU) has implemented various regulations and directives to prevent money laundering and terrorist financing. This article provides a summary of these key regulations and their impact on the EU’s efforts to combat financial crime.

Key EU Regulations and Directives

Fourth and Fifth Money Laundering Directives

  • Objective: Prevent money laundering and terrorist financing by extending the scope of EU law to cover new services, such as virtual currency providers and art merchants.
  • Key points:
    • Cover virtual currency providers and art merchants under AML/CFT regulations
    • Require these entities to implement effective AML/CFT controls

Second Funds Transfer Regulation

  • Objective: Improve transparency in fund transfers by requiring payment service providers to deliver detailed information about payers and payees.
  • Key points:
    • Payment service providers must deliver information on payers and payees along with fund transfers, regardless of currency
    • This regulation aims to enhance transparency and prevent financial crime

EU AML Package

The EU AML package consists of four key statutes:

1. AML Regulation

  • Objective: Establish a new supervisory authority for AML/CFT.
  • Key points:
    • Create a new supervisory body to oversee AML/CFT compliance
    • Enhance coordination and cooperation among EU member states

2. 6th Anti-Money Laundering Directive (6th AMLD)

  • Objective: Strengthen and harmonize regulation and supervision, improve coordination, and establish a new supervisory and coordination authority.
  • Key points:
    • Harmonize AML/CFT regulations across EU member states
    • Establish a new supervisory body to oversee AML/CFT compliance

3. Recast of the Regulation on Transfers of Funds

  • Objective: Revises the regulation to align with the 5th Money Laundering Directive.
  • Key points:
    • Align the regulation with the 5th Money Laundering Directive’s requirements
    • Enhance transparency and prevent financial crime

Proposal for Amendments to the Directive on Access to Financial Information

  • Objective: Improve access to information related to beneficial ownership.
  • Key points:
    • Enhance transparency by improving access to beneficial ownership information
    • Prevent financial crime by making it more difficult for individuals to hide their true identities

FATF Recommendations

The Financial Action Task Force (FATF) is an intergovernmental organization that develops and issues recommendations to prevent money laundering, terrorist financing, and proliferation of weapons of mass destruction.

Implementation in Finland

Finland has implemented these EU regulations and directives, including the establishment of a new Bank and Payment Accounts Control System and amendments to the Anti-Money Laundering Act.