Financial Crime World

EU Takes Aim at Financial Crime with Sweeping Reform Package

A Major Overhaul of Financial Crime Prevention Policies

The European Union has formally endorsed a comprehensive anti-money laundering package that promises to revolutionize the way illicit funds are tracked and prevented from entering the EU’s financial system. This sweeping reform package, five years in the making, targets some of the most common methods used by criminals to launder money.

Key Features of the Reform Package

  • Registration of Beneficial Owners: Foreign companies that have owned property in the EU since 2014 will be required to register their beneficial owners, making it harder for corrupt individuals to hide behind shell companies.
  • Cash Transaction Caps: Cash transactions above €10,000 will be capped, with member states allowed to lower this threshold if they deem necessary.
  • Regulations on High-Value Goods: Businesses that trade in high-value goods such as precious stones and metals will be required to conduct client checks before making sales worth more than €10,000.
  • Automatic Reporting of Luxury Item Sales: Luxury items like yachts and planes valued above €7.5 million will trigger automatic reporting of their sale to financial intelligence units.
  • Stricter Rules for Crowdfunding Platforms: To prevent sham fundraising campaigns from being advertised on crowdfunding platforms, stricter rules requiring these platforms to vet project owners and intended projects before allowing them to be promoted.
  • Greater Clarity and Regulation in the Cryptocurrency World: EU-wide requirements for traceability and oversight of crypto-asset transfers involving the bloc will bring greater clarity and regulation to this space. Crypto-asset service providers will be subject to anti-money laundering checks similar to those carried out on banks and other financial sector entities.
  • Tackling Corruption in Professional Sports: Football clubs and agents will be required to carry out checks on certain financial transactions, such as player transfers, investments, and sponsorships.

A Key Difference on the Ground

The European Commission says the new package is designed to make a “key difference on the ground” by improving the integrity of the EU’s financial system. With real change finally coming, it remains to be seen how effective these reforms will be in preventing financial crime and protecting citizens’ savings.