The European Union is set to enhance its anti-money laundering and counter-terrorism financing safeguards following a preliminary accord between the European Council and the Parliament. This overhaul aims to plug existing legislative gaps and prevent the European financial system from being exploited for laundering funds derived from crime and terrorism.
Expanding Regulatory Oversight
Under the new arrangements, a broader range of businesses will have to adhere to strict anti-money laundering protocols. This includes cryptocurrency operators who will be mandated to exercise customer checks and report dubious transactions exceeding €1,000, and those involved in the trade of high-value goods, such as art and luxury items, as well as professional football organizations and real estate companies.
Cash transactions across EU states will be capped at €10,000, though member countries are free to enforce stricter limits. Additionally, businesses will have to identify individuals partaking in one-off cash dealings valued between €3,000 and €10,000.
Enhancing Transparency and Intelligence Sharing
The directive will bolster the transparency of beneficial ownership, demanding entities to unravel and understand complex company ownership arrangements and to document beneficial owners dating back to 2014 for non-EU entities with EU property holdings.
Financial intelligence units will be granted increased access to government databases to scrutinize suspicious activity reports effectively. Enhanced due diligence will be obligatory for financial institutions that maintain relationships with entities from high-risk countries or that are linked to corrupt figures.
The EU and individual nations will undertake in-depth money laundering risk evaluations to inform and shape future regulations. The agreement also encourages improved collaboration among intelligence units for transnational cases. Furthermore, the crypto sector must contend with new rules imposing identity verification and monitoring the potential risks associated with private wallet transactions.
Upon final approval, these reforms, which also include the introduction of anti-money laundering measures to previously unregulated sectors such as precious metals and arts, will establish the EU’s standards as the most progressive globally. The finalized texts, currently undergoing final revisions, will soon be presented for adoption by EU national representatives and the European Parliament, paving the way for broad application and a significant enhancement to the EU’s financial defenses.
