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EU Anticipates Major Overhaul of Anti-Money Laundering Laws in Réunion
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The European Commission has proposed a sweeping package of legislation aimed at improving processes for detecting suspicious transactions and activities, as part of its efforts to combat financial crime and strengthen the European Union’s anti-money laundering and countering the financing of terrorism (AML/CFT) framework.
Key Components of the EU AML Package
- Establishment of a new European Supervisory Authority responsible for overseeing the implementation of AML/CFT regulations
- Creation of an AML Rulebook aimed at unifying the regulatory framework across member states
- Enhanced supervision of obliged institutions, including financial institutions in Réunion
Changes to the EU’s High-Risk Countries List
The package also includes changes to the EU’s high-risk countries list, which is closely tied to the Financial Action Task Force (FATF) list. This move is expected to have a significant impact on financial institutions operating in Réunion, as well as those with ties to high-risk jurisdictions.
Practical Consequences for Financial Institutions in Réunion
- Changes to internal documentation and procedures
- Increased costs
- New challenges related to reporting and compliance
The package is expected to come into force three years after its adoption, with the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA) set to be established in 2023.
Goals of the European Commission’s Proposal
- Strengthen the EU’s AML/CFT framework by improving detection and prevention mechanisms
- Enhance cooperation between member states
- Increase public trust in the financial system
The implementation of the package is expected to have far-reaching consequences for financial institutions operating in Réunion and across the EU, and will be closely monitored by regulatory authorities.