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EU Regulations and Directives on Money Laundering and Terrorist Financing

Implementing Anti-Money Laundering Legislation in Finland

The European Union (EU) has enacted several directives aimed at preventing money laundering and terrorist financing. In this article, we will summarize the main points related to these regulations and their implementation in Finland.

Fourth and Fifth Money Laundering Directives

The EU has implemented two key directives to strengthen anti-money laundering (AML) legislation:

  • Fourth Directive: Focused on strengthening customer due diligence and reporting requirements.
  • Fifth Directive: Extended the scope of AML legislation to virtual currency providers and art merchants.

Second Funds Transfer Regulation

This regulation requires payment service providers to deliver detailed information about payers and payees along with funds transfers. The key points include:

  • Detailed information must be provided, including verification of correctness
  • Payment service providers must comply with the regulation

EU Anti-Money Laundering Package

The EU has proposed a comprehensive reform of AML legislation, which includes:

  • Regulation Establishing an EU Anti-Money Laundering Authority (AMLA Regulation): Creates a centralized authority to oversee and enforce AML regulations
  • Anti-Money Laundering Regulation (AML Regulation): Sets out the requirements for financial institutions to implement effective AML controls
  • Sixth Anti-Money Laundering Directive (6th AML Directive): Extends the scope of AML legislation to include new sectors and activities
  • Recast of the Regulation on Transfers of Funds: Updates the regulation to reflect the latest developments in money laundering and terrorist financing prevention

Recommendations of the Financial Action Task Force (FATF)

The FATF, an intergovernmental organization under the OECD, has developed 40 recommendations for preventing money laundering and terrorist financing. These recommendations are committed to be implemented by member countries, including Finland.

Implementation in Finland

The Finnish Ministry of Finance has launched a comprehensive reform of AML legislation to implement the new EU rules. This includes:

  • Strengthening customer due diligence and reporting requirements
  • Extending the scope of AML legislation to virtual currency providers and art merchants
  • Implementing the EU Anti-Money Laundering Package, including the creation of an EU anti-money laundering authority (AMLA Regulation)