European Parliament approves tougher measures against money laundering and terrorist financing and the 6th AML Directive
On 28 March 2023, the European Parliament announced that the MEPs approved stricter rules to close existing gaps in combating money laundering, terrorist financing, and evasion of sanctions in the European Union. MEPs from the Economic and Monetary Affairs and Civil Liberties, Justice and Home Affairs committees have adopted their position on three pieces of draft legislation regarding the financing provisions of the EU Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) policy.
The draft legislation package consists of the EU “single rulebook” regulation, the 6th Anti-Money Laundering directive, and the regulation establishing the European Anti-Money Laundering Authority (AMLA). The EU “single rulebook” includes provisions on conducting due diligence on customers, transparency of beneficial owners and the use of anonymous instruments, such as crypto-assets. It also covers new entities like crowdfunding platforms and addresses “golden” passports and visas.
The 6th Anti-Money Laundering directive contains national provisions on supervision and Financial Intelligence Units and grants competent authorities access to necessary and reliable information such as beneficial ownership registers and assets stored in free zones.
The regulation establishing AMLA aims to monitor risks and threats within and outside the EU and directly supervise specific credit and financial institutions based on their risk level. AMLA would initially supervise 40 entities with the highest residual risk profile and present in at least two member states. To fulfil its duties, AMLA could mandate companies and people to hand over documents and information, conduct on-site visits with judicial authorisation, and impose significant sanctions for material breaches. The European Parliament hopes to extend the agency’s competence to draw up lists of high-risk non-EU countries.
The European Parliament will begin negotiations on the AML/CFT package after a confirmation during a plenary session in April. The new legislation is a significant step towards closing existing gaps in the EU's fight against money laundering, terrorist financing, and evasion of sanctions.
The press release can be found here.