EU Cracks Down on Money Laundering with New Regulations
The European Union has introduced a raft of new regulations aimed at strengthening its fight against money laundering and terrorist financing. The “single regulation” harmonizes anti-money laundering (AML) rules across member states, introducing provisions on customer due diligence, beneficial owner transparency, and the use of anonymous instruments such as crypto-assets.
Key Developments
- European Anti-Money Laundering Authority (AMLA): Created to ensure compliance with AML requirements, AMLA will have supervisory and investigative powers. It will work closely with national authorities and financial institutions to detect and prevent money laundering and terrorist financing activities.
- Beneficial Ownership Register: France has been at the forefront of efforts to establish a beneficial ownership register, listing accurate information on corporate structures and ownership. However, a recent court ruling raised concerns about data privacy, leading France to suspend access to the register. Access was later restored pending further review.
Key Provisions
- Payment Transparency: Payment service providers must include accurate information on originators and beneficiaries in payment orders for funds transfers. This includes names, payment account numbers, and other relevant details.
- Anti-Money Laundering Requirements: Real estate professionals, lawyers, notaries, and other non-financial institutions are subject to specific AML requirements, including currency reporting and monitoring of transactions.
FATF Evaluation
France’s anti-money laundering regime was recently evaluated by the Financial Action Task Force (FATF), which praised its robust framework but identified areas for improvement. The country needs to strengthen oversight of certain sectors, such as real estate and not-for-profit organizations.
EU’s Sixth Anti-Money Laundering Directive
The EU has proposed a new directive aimed at standardizing European supervision, giving financial intelligence units greater powers to detect and prevent money laundering, and harmonizing access to registers of beneficial owners. The directive is expected to come into force in the coming months.
Conclusion
The EU’s AML regulations aim to create a more robust and effective framework for combating money laundering and terrorist financing across the continent. By strengthening supervision, improving transparency, and enhancing cooperation between authorities and financial institutions, the EU hopes to better protect its citizens and economy from these illicit activities.