European Union Regulations on Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT)

The European Union (EU) has implemented a comprehensive framework to combat money laundering and terrorist financing through various regulations, directives, and recommendations. This article provides an overview of these regulations and Finland’s implementation of them.

Key Regulations and Directives

1. Act on the Financial Intelligence Unit

• Enacted by Finland as part of the EU’s AML framework
• Plays a crucial role in detecting and preventing money laundering activities

2. Fourth and Fifth Money Laundering Directives

• Fourth Directive:
  • Extended the scope of EU law to financing services that leverage modern technology
  • Aimed at strengthening anti-money laundering measures
• Fifth Directive:
  • Formulated in response to terrorist attacks
  • Required automatic systems for delivering information on bank and payment account holders
  • Extended customer due diligence procedures

3. Second Funds Transfer Regulation

• Aimed at preventing money laundering and terrorist financing
• Required detailed information on payers and payees, as well as verification of that information

4. EU Anti-Money Laundering Package

• Introduced a comprehensive package to strengthen AML regulation and supervision
• Included:
  • Regulation establishing an EU anti-money laundering authority (AMLA Regulation)
  • Anti-Money Laundering Regulation (AML Regulation)
  • Sixth Anti-Money Laundering Directive (6th AML Directive)

5. Recast of the Regulation on Transfers of Funds

• Aimed at preventing money laundering and terrorist financing
• Required detailed information on payers and payees, as well as verification of that information

6. Recommendations of the Financial Action Task Force (FATF)

• Developed by an intergovernmental organization to prevent money laundering, terrorist financing, and proliferation of weapons of mass destruction