On 30 of May 2024 the Council of the European Union adopted the Anti-Money Laundering and Anti-Terrorism Financing Package (the AML Package). The AML Package contains an EU Single Rulebook Regulation, a new Directive (the sixth AML Directive), a Regulation establishing a new AML Authority and a Regulation on information accompanying transfers of funds and certain crypto-assets and amending Directive (EU) 2015/849.
The AML Package is a comprehensive set of measures aimed at combating money laundering and terrorist financing within the EU. Arguably the most important change is be the introduction of a Regulation that will apply directly in all Member States. This will mean that most of the provisions in the respective laws of the Member States will be replaced by the Regulation. The EU Single Rulebook Regulation will apply from mid-2027 and the Directive must be implemented in national laws by mid-2027 as well.
The package includes several key elements that are designed to strengthen the EU’s AML framework and enhance coordination among Member States:
1.New EU AML Agency
One of the central components of the AML Package is the creation of a new EU agency, the European AML Authority (AMLA). This agency will be responsible for overseeing the implementation of AML rules across the EU, conducting risk assessments, and coordinating national authorities’ efforts to combat money laundering.
To supervise the new rules on combatting money laundering, a new authority – the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA) will be established in Frankfurt. AMLA will be charged with directly supervising the riskiest financial entities, intervening in case of supervisory failures, acting as a central hub for supervisors and mediating disputes between them. AMLA will also supervise the implementation of targeted financial sanctions.
The AMLA will take over the current AML/CFT responsibilities and powers of the European Central Bank and thereby transform the supervision of AML/CFT activities in the EU. The Authority will operate as a single integrated system of AML/CFT supervision across the EU, based on common supervisory methods and convergence of high supervisory standards. Within its activities, the AMLA will directly supervise some of the riskiest financial institutions, including cryptoasset service
providers that operate at least in six Member States or require immediate action to address imminent risks. The AMLA will monitor and coordinate national supervisors responsible for other financial entities, as well as coordinate supervisors of non-financial entities. The Authority’s responsibility will include the support of cooperation among national Financial Intelligence Units (FIUs), and it will facilitate coordination and joint analyses between them to improve the detection of illegal financial flows of a cross-border nature. The laws also give FIUs more powers to analyse and detect money laundering and terrorist financing cases as well as to suspend suspicious transactions.
The AMLA is expected to start its operations in mid-2025 and will begin direct supervision after the new EU AML/CFT framework applies, in 2027.
2.Broader Access to New Registers and Information Sources
The AML Package also includes new rules aimed at improving transparency around beneficial ownership of companies and trusts. Member States will be required to establish central registers of beneficial ownership information, making it more difficult for individuals to hide their true identities behind complex corporate structures.
The new laws ensure that people with a legitimate interest, including journalists, media professionals, civil society organisations, competent authorities, and supervisory bodies, will have immediate, unfiltered, direct and free access to beneficial ownership information held in national registries and interconnected at EU level. In addition to current information, the registries will also include data going back at least five years.
3.Wide-Reaching Due Diligence
Another key aspect of the EU Single Rulebook is the introduction of new rules governing virtual currencies and digital assets. Virtual currency exchanges and wallet providers will now be subject to AML requirements, helping to prevent these platforms from being used to launder illicit funds. Cryptoasset service providers will be obliged to conduct customer due diligence for transactions of up to EUR 1000 or more. The anonymous cryptoasset wallets will be also prohibited.
The new laws include enhanced due diligence measures and checks on customers’ identity, after which so-called obliged entities have to report suspicious activities to FIUs and other competent authorities. From 2029, top-tier professional football clubs involved in high-value financial transactions with investors or sponsors, including advertisers and the transfer of players will also have to verify their customers’ identities, monitor transactions, and report any suspicious transaction to FIUs.
The legislation also contains enhanced vigilance provisions regarding individuals trading in luxury goods such as precious metals, precious stones, jewelleries, as well as luxury cars, airplanes and yachts), ultra-rich individuals (total wealth worth at least EUR 50 000 000, excluding their main residence), an EU-wide limit of EUR 10 000 on cash payments (Member States will have the option of setting a lower limit), except between private individuals in a non-professional context, and measures to ensure compliance with targeted financial sanctions and avoid sanctions being circumvented.
All obliged entities will be required to apply enhanced due diligence measures in relation to high-risk third countries whose AML frameworks pose a threat to the integrity of the EU’s internal market.
4.Conclusions
The new EU AML Package represents a significant step forward in the fight against money laundering and terrorist financing. By strengthening the EU’s AML framework, enhancing transparency around beneficial ownership, and regulating virtual currencies, the package aims to make it harder for criminals to exploit financial systems for their own gain.
