On Tuesday, Members of the European Parliament approved updated rules for mitigating money laundering and terrorist financing. These rules are much stricter than the previous ones.
Economic and Monetary Affairs and Civil Liberties, Justice and Home Affairs committees adopted their position where three pieces of legislation package contain the following:
Key Takeaways
Prevention of Money Laundering & Terrorist Funding
- Entities including banks, crypto asset managers, real estate agents, and football clubs need to verify customers' identity and ownership and establish risks of money laundering and terrorist financing.
- Information is to be transmitted to a central register.
- MEPs propose capping cash payments at €7,000 and €1,000 for crypto-asset transfers where customer identity cannot be verified.
- MEPs want to ban "golden passport" schemes and impose strong anti-money laundering controls on "golden visa" schemes due to the high risk of misuse by criminals.
FI Units
- Each member state should establish a financial intelligence unit (FIU) to prevent, report, and combat money laundering and terrorist financing.
- FIUs should share information with each other and with competent authorities as well as cooperate with AMLA, Europol, Eurojust, and the European Public Prosecutor’s Office.
Beneficial Ownership
- FIUs and competent authorities should access beneficial ownership, bank accounts, and land/real estate registers to detect money laundering schemes and freeze assets.
- MEPs want to aggregate information on ownership of high-value goods like yachts, planes, and cars, and goods stored in free zones.
- Beneficial ownership means having 15% + one share, voting rights, or other direct or indirect ownership interest, or 5% + one share in the extractive industry or a higher-risk company.
AMLA ensures consistent enforcement
- The new AMLA would monitor risks and threats within and outside the EU and supervise specific credit and financial institutions based on their risk level.
- Initially, it would supervise 40 entities with the highest residual risk profile and present in at least two member states, with at least one entity from each member state.
- AMLA could mandate companies and people to hand over documents and information, conduct on-site visits with judicial authorization, and impose sanctions for material breaches.
- MEPs wish to extend AMLA's competence to drawing up lists of high-risk non-EU countries, mediating between national financial supervisors, supervising and investigating the national implementation of the single AML rulebook, overseeing non-financial sector supervisors, and receiving whistleblower complaints.
- The agency's seat will be decided during negotiations between the Parliament and Council.