- New EU regulations target money laundering and terrorist financing, affecting large cash transactions, crypto firms, and football clubs.
- Establishes a uniform regulatory framework and a Frankfurt-based authority to oversee compliance, especially for high-risk entities.
- Requires stringent identity checks and reporting of suspicious activities by banks, asset managers, and real/virtual estate agents.
The European Parliament has passed a new set of regulations aimed at strengthening anti-money laundering and anti-terrorist financing efforts throughout the EU. These regulations specifically address large cash transactions, cryptocurrency entities, and football clubs, among others. The legislation not only establishes a uniform regulatory framework for the 27 member states of the European Union but also initiates a supervisory authority in Frankfurt tasked with overseeing the enforcement of these rules, especially targeting those entities considered most vulnerable to risks.
According to a press release on the matter, the new directives require stringent due diligence and identity verification processes. Following these procedures, entities required to comply (such as banks, asset managers, and agents dealing with real and virtual properties) must report any suspicious activities to Financial Intelligence Units and other relevant authorities.
“The new laws include enhanced due diligence measures and checks on customers’ identity, after which so-called obliged entities (e.g. banks, assets and crypto assets managers or real and virtual estate agents) have to report suspicious activities to [Financial Intelligence Units] and other competent authorities”
Observers of cryptocurrency policy in the EU have voiced apprehensions that the rules set for digital assets may be excessively stringent relative to those for other financial sectors. These concerns emerged when the EU reached a preliminary agreement on the regulatory package in January.
Furthermore, the updated regulations aim to grant “immediate, unfiltered, direct, and free access” to beneficial ownership information to individuals or groups with a “legitimate interest.” This includes journalists, media professionals, civil society organizations, and other relevant authorities. Beneficial ownership information is defined as data that identifies the individuals or entities owning or controlling companies. This information will be available through national registries and will be interconnected at the EU level.
In March, a combined session of the Committee on Civil Liberties, Justice and Home Affairs and the Committee on Economic and Monetary Affairs conducted a vote on the drafts of the legislative package, setting the stage for a full parliamentary vote that took place on Thursday.
This vote followed a political consensus reached in January on the Anti-Money Laundering Regulation (AMLR), which mandates that cryptocurrency service providers adhere to customer verification processes and oversee cross-border transfers as well as transactions involving self-hosted wallets. Additionally, the comprehensive legislative package includes the creation of an Anti-Money Laundering Authority (AMLA), which will be based in Frankfurt, Germany. The vote by the joint committee resulted in 68 members in favor and 10 against the establishment of the AMLA on Tuesday.
For the package to be enacted as law, the EU Council, which represents lawmakers from the member states, must still officially approve it.
