On Wednesday 17 January, the EU Council and the European Parliament reached a provisional agreement on the revised directive (AMLD 6) and the strengthened regulation (AMLR) on combating money laundering and terrorist financing (AML/CFT) (see EUROPE 13330/34).
“This agreement will improve the way national systems against money laundering and terrorist financing are organised and work together”, said Vincent Van Peteghem, the Belgian Finance Minister, in a press release. “This will ensure that fraudsters, organised crime and terrorists will have no space left for legitimising their proceeds through the financial system”, he added.
The new regulation will apply to the private sector, while the directive will deal with the organisation of institutional AML/CFT systems at national level in the Member States.
AMLR
“The agreement reached yesterday will put an end to privileges for the richest and tighten the rules on the riskiest sectors, including football and the luxury goods industry”, commented MEP Damien Carême (Greens/EFA, French) in a statement.
The luxury goods industry has been added to the list of entities subject to obligations, including traders in luxury goods such as precious metals, precious stones, jewellers, watchmakers and goldsmiths. Sellers of luxury cars, aircraft and yachts, as well as cultural goods such as works of art, will also become obliged entities. The rules will also apply to crypto-asset service providers (CASPs), who will have to verify facts and information about their customers and report any suspicious activity.
As requested by the European Parliament, the provisional agreement recognises that the football sector represents a high risk and extends the list of obliged entities to include professional football clubs and agents. However, as the sector and the risk it represents vary widely, Member States will have the option of removing them from the list if they present a low risk. The rules provide for a longer transition period, of 5 years after entry into force, compared with 3 years for the other obligated entities.
The Council and Parliament have agreed that credit and financial institutions will take enhanced due diligence measures where business relationships with high net-worth individuals involve the handling of large amounts of assets. Failure to comply with these measures will be considered an aggravating circumstance in the sanctioning regime.
An EU-wide ceiling of €10,000 has been set for cash payments, but Member States will be able to impose a lower ceiling if they so wish. Obliged entities will have to identify and verify the identity of a person who carries out an occasional cash transaction of between €3,000 and €10,000.
The agreement includes a harmonisation of the criteria for beneficial ownership, which will be based on two elements: ownership and control. These must both be analysed in order to identify all the beneficial owners of one or more legal entities, including non-EU entities when they carry out activities or purchase property in the EU. The agreement sets the threshold for beneficial ownership at 25%.
Finally, for high-risk third countries, obliged entities will be required to apply enhanced due diligence measures to occasional transactions and business relationships. The high level of risk will justify the application of additional specific EU or national countermeasures, whether at the level of obliged entities or Member States.
AMLD
With regard to beneficial ownership registers, the information submitted to the central register will have to be verified. Entities or arrangements associated with persons or entities subject to targeted financial sanctions will have to be reported. The entities responsible for the registers will be able to carry out inspections at the premises of registered entities, in the event of doubt.
Members of the public with a legitimate interest, including the press and civil society, will be able to access the registers. Similarly, in order to facilitate investigations into criminal schemes involving real estate, real estate registers will be accessible to the competent authorities via a single access point.
“In the digital age, we need to make sure that data are available quickly and can be processed effectively”, stressed co-rapporteur Luděk Niedermayer (EPP, Czech). Under the agreement, the financial intelligence units (FIUs) set up by the Member States will have immediate and direct access to financial, administrative and law enforcement information, including tax information, information on funds and other assets frozen in application of targeted financial sanctions, information on fund transfers and crypto-transfers, among other things.
In cross-border cases, they will cooperate more closely with their counterparts. The FIUs’ decentralised IT network, the FIU.net system, will be improved to enable rapid dissemination of cross-border reports. The agreement establishes a firm framework enabling FIUs to suspend or refuse their consent to a transaction, in order to carry out their analyses, assess suspicions and disseminate the results to the relevant authorities so that appropriate measures can be taken.
Member States’ supervisory authorities will ensure that all obliged entities established on its territory are subject to adequate and effective supervision, using a risk-based approach. Supervisory colleges will be introduced.
The European Commission will have to carry out an EU-wide assessment of the risks of money laundering and terrorist financing and will make recommendations to the Member States on the measures they should take.
The agreement must be formally adopted by the European Parliament and the EU Council before coming into force. The last step in finalising the anti-money laundering package is determining the seat and budget allocated to the future European Anti-Money Laundering Authority (AMLA) (see EUROPE 13318/27). (Original version in French by Anne Damiani)