International edition
September 22, 2021

By Ron Mendelson, Fast Offshore Founding Partner

EU set to approve new, all-encompassing AML/CFT laws

EU set to approve new, all-encompassing AML/CFT laws
The reforms include the establishment of the EU Anti-Money Laundering Authority. This entity will coordinate with all national AML bodies and Financial Intelligence Units in a centralized manner.
Western Europe | 08/03/2021

In his latest column for Yogonet, the igaming industry consultant analyzes the European Commission's legislation package that contains four proposals, from regulation to establish a new AML/CFT authority, one specific to Customer Due Diligence and Beneficial Owner, to a revision of the 2015 regulation on Transfers of Funds to trace transfers of crypto assets.

Ron Mendelson is the Director of Costa-Rica based International Business & Corporate Services consultancy firm, Fast Offshore. With ... (+ Info)

T

he European Commission has proposed sweeping new legislation to combat money laundering and terrorist financing in the 27-strong bloc and beyond.

Currently, the EU has a series of Directives called the AMLD or Anti Money Laundering Directives. Currently, in the 5th edition, they are updated periodically, and member states are given a deadline until which they must integrate the law into domestic legislation. But the new proposal goes beyond the AMLD and foresees the creation of a new authority and supervisory system.

What’s in the proposal?

The reforms include the establishment of the EU Anti-Money Laundering Authority (AMLA). This entity will coordinate with all national AML bodies and Financial Intelligence Units in a centralized manner. It will seek to ensure that businesses and individuals are in full compliance with EU money-laundering rules.

To do this, a system will be created which will monitor activity and issues throughout the bloc. It will also facilitate better collaboration between the Member States and relevant entities. This will help to tackle cross-border crimes.

Other matters such as due diligence, beneficial ownership, and the obligations of FIUs and supervisors are also set to be overhauled.

Under the new proposals, a ‘black list’ and ‘grey list’ will be created, and those at a higher risk of money laundering activities will be placed on it. 

Other areas of focus will include limiting cash payments to a maximum of EUR 10,000. While most member states already have this limit in place, the EC wants to make it a standard throughout the Union.

Lastly, the reforms will include cryptocurrency-specific legislation. Currently, EU law only applies to certain categories of digital currency, but this is set to change.

Overall, the package contains four legislative proposals

  • A regulation to establish a new AML/CFT authority
  • A regulation specific to CDD and BO,
  • The 6th Directive on AML/CFT
  • A revision of the 2015 regulation on Transfers of Funds to trace transfers of crypto assets.

The proposals will be presented to the European Council and its President. If and when they are approved, the AMLA is scheduled to launch in 2024.

What’s the reaction?

The European Gaming and Betting Association commented on the news:

“The European Gaming and Betting Association welcomes the proposals and reaffirms its commitment to work with all relevant regulatory bodies, including the European Commission, to combat money laundering in the EU.”

The organization added that there were currently concerns that some EU Member States haven’t taken money laundering seriously and have failed to take action. Earlier this year, Malta was placed on the FATF grey list for failure to comply with some minimum standards.

The first EU country to be placed on the list, it spells trouble for iGaming and crypto operators that had flocked there to set up shop. But following its downgrade, many operators have got cold feet and are looking for alternatives elsewhere. Concerns have been raised about issues with banking, transfers, and over-regulation as the country tries to get itself removed from the list.

The EGBA is currently working on creating specific guidelines for EU operators to help them cope with the increasingly tough rules in the region.

An EU press release described the proposals as “ambitious” and reiterated that it’s “a part of the Commission’s commitment to protecting EU citizens and the EU financial system from money laundering and terrorist financing.

Valdis Dombrovskis, Executive Vice-President for an Economy that works for people, said: 

“Every fresh money laundering scandal is one scandal too many – and a wake-up call that our work to close the gaps in our financial system is not yet done. We have made huge strides in recent years and our EU AML rules are now among the toughest in the world. 

But they now need to be applied consistently and closely supervised to make sure they really bite. This is why we are today taking these bold steps to close the door on money laundering and stop criminals from lining their pockets with ill-gotten gains.”

What does this mean for you?

It means you need to be prepared. Not only do you need to be up to speed with current AML/CFT rules and compliance, but you need to consider the new proposals. You have two years to get yourself fully compliant and ready for what lies ahead. Fast Offshore can help you get your policies, processes, and other procedures in place to ensure you meet national and international AML/CFT obligations.

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