NEW DEVELOPMENTS IN THE FIGHT AGAINST MONEY LAUNDERING AND TERRORIST FINANCING

#79New developments in the fight against money laundering and terrorist financing

On 28 March 2023, MEPs from the relevant committees adopted an opinion on the new Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) package.

The legislative package consists of a proposal for a Regulation of the European Parliament and of the Council on the prevention of the use of the financial system for the purpose of money laundering or terrorist financing; a proposal for a Directive of the European Parliament and of the Council on the prevention of the use of the financial system for the purpose of money laundering or terrorist financing: mechanisms to be put in place by the Member States (hereinafter referred to as the '6th AML Directive'); and a proposal for a Regulation of the European Parliament and of the Council establishing an Anti-Money Laundering and Anti-Terrorist Financing Authority (hereinafter referred to as the 'AMLA Regulation').

The legislation (if finally adopted) will have a relatively large impact on the current AML/CFT legislation, whether at European or national level. The biggest new developments we will look at are the establishment of the Anti-Money Laundering and Counter-Terrorist Financing Authority and the restriction of payments in cash and crypto-assets.

1. Establishment of the Office for Combating Money Laundering and Financing of Terrorism

The Anti-Money Laundering and Countering the Financing of Terrorism Authority (AMLA) will be the central authority and element of an integrated AML/CFT supervisory system, where it will include national authorities with a mandate to carry out AML/CFT supervision. The Explanatory Memorandum to the AMLA Regulation shows that the practice and supervision of AML/CFT within the EU, which is carried out at Member State level, is of a lower level of quality and effectiveness, due to significant differences in practices across Member States. The AMLA will also carry out direct supervision in relation to the most risky cross-border obliged entities in the financial sector, and will contribute directly to the prevention of money laundering and terrorist financing in the EU.

2. limiting payments in cash and crypto-assets

In order to limit the misuse of crypto-asset payments, maximum limits have been agreed: €7,000 for cash payments and €1,000 for the transfer of crypto-assets. If the limits are exceeded, the company must identify its customers.

Proposals for new European rules are still subject to change during the legislative process. Their final form presupposes agreement on the final text between the European Commission, the European Parliament and the Council of the EU. In the light of the above, it is clear that European legislation in this area will only become more stringent.