Money laundering and terrorist financing pose a serious threat to the integrity of the EU economy and financial system and the security of its citizens. Europol estimated that around 1% of the EU’s annual Gross Domestic Product is detected as being involved in suspect financial activity. Therefore, certain decisions have been taken by the EU.
The EU Security Union Strategy for 2020-2025 highlights the importance of enhancing the EU’s framework for AML and CTF.
The European Commission also presented an ambitious package of legislative proposals to strengthen the EU’s AML / CFT rules, in 2021. The Commission commits to protect EU citizens and the EU’s financial system from money laundering and terrorist financing. It aims to improve the detection of suspicious transactions and activities, and to close loopholes used by criminals to launder illicit proceeds or finance terrorist activities through the financial system.
The EU Parliament’s Committees have adopted their position on three pieces of draft legislation on the financing provisions of AML / CFT policy. The package consists of:
Entities including banks, asset managers and crypto asset managers will be required to verify their customers’ identity, what they own and who controls the company. They will also have to establish detailed types of risk of money laundering and terrorist financing (ML / TF) in their sector of activity and transmit the relevant information to a central register.
The EBA has published two sets of guidelines on the effective management of ML / TF risks when providing access to financial services.
The EBA has launched a consultation on amendments to its guidelines on risk-based AML / CFT supervision, which are extended to crypto asset service providers (CASPs). The amendments, among other things:
Detailed Guidelines under Prevention of the use of the financial system for the purposes of money laundering or terrorist financing
The Commission will also provide law enforcement authorities with access to this system, speeding up financial investigations and the recovery of criminal assets in cross-border cases. The proposed regulation makes several changes to the existing AML / CFT Directive to bring about a greater level of harmonization and convergence in the application of AML / CFT rules across the EU: