New European Union Anti-Money Laundering Package

The Council and Parliament of the EU have reached a provisional agreement on an anti-money laundering package. This includes exhaustive harmonization of rules across the EU, expanding the list of obliged entities to include most of the crypto sector and other sectors such as luxury goods and professional football clubs. Enhanced due diligence measures for cross-border transactions and high-risk third countries are introduced, alongside an EU-wide €10,000 limit on cash payments. The agreement also improves beneficial ownership transparency and strengthens the role of Financial Intelligence Units (FIUs) and supervisors in combatting money laundering and terrorist financing. The package is a significant step in protecting the EU's financial system and is pending formal adoption.

Key aspects include:

• Harmonization of Rules: Uniform regulations across EU member states aim to eliminate loopholes that criminals exploit for money laundering or financing terrorist activities.

• Expansion of Obliged Entities: The agreement extends the obligation to prevent money laundering to a broader range of entities, including crypto-asset service providers, luxury goods traders, and professional football clubs. This reflects a recognition of the diverse channels through which illicit funds can be laundered.

• Enhanced Due Diligence: Special emphasis is placed on due diligence, especially for cross-border transactions and dealings with high-risk third countries. The agreement mandates stricter scrutiny to prevent misuse of the financial system.

• Cash Payment Limits: Setting a maximum limit for cash transactions at €10,000 is a significant move to curb large-scale cash-based money laundering.

• Beneficial Ownership Transparency: The agreement strengthens the rules around the identification of the true owners of businesses and legal entities, making it harder to use complex ownership structures for illicit activities.

• Strengthening FIUs and Supervision: Financial Intelligence Units and supervisory bodies are empowered with more access to information and enhanced responsibilities, ensuring more effective monitoring and enforcement of the regulations.

• Risk Assessment Framework: The EU and its member states will continuously assess money laundering and terrorist financing risks, adapting their strategies and measures accordingly.

• Next Steps for Implementation: The agreement is pending formal adoption and will necessitate updates to national legislations and compliance practices across the EU.

This agreement marks a significant milestone in the EU's commitment to safeguarding its financial system and economy from the threats of money laundering and terrorist financing, reflecting a collaborative effort between various institutions and member states.