Stronger EU anti-money laundering package

In the middle of January 2024, the European Council and Parliament reached a provisional agreement on parts of an anti-money laundering package aimed at protecting EU citizens and the EU financial system against money laundering and terrorist financing. As a result of the rules, national systems to fight money laundering and terrorist financing will become more organised and cooperation between these systems will improve. With the new package, all the rules for the private sector will be transferred to a new regulation, and the institutional arrangements for combating money laundering and terrorist financing will be organised at national level and in the Member States under a directive.

Obligated service providers - such as financial institutions, banks, real estate agencies, asset management services, casinos and traders - play an important role in the framework to prevent money laundering and terrorist financing, as they have the possibility to detect suspicious activities. The provisional agreement adds new entities to the list of these obligated service providers: the new rules cover most of the crypto industry and require all crypto service providers to conduct due diligence on their customers. The customer due diligence and reporting obligations will also be extended to other sectors, such as luxury goods traders - for example, traders in precious metals and stones, jewellers, watchmakers and goldsmiths - and traders in luxury cars, aircraft and yachts, and cultural goods (such as works of art) will also become mandatory service providers. The provisional agreement also considers football as a high-risk sector and therefore extends the list of obligated service providers to professional football clubs and agents in the sector.

The Council and the Parliament agreed that credit and financial institutions should implement increased due diligence measures when business relationships with particularly wealthy individuals involve the management of large amounts of assets. In addition, obligated service providers should apply enhanced due diligence measures to high-risk third-country occasional transactions and business relationships where weaknesses in national anti-money laundering and anti-terrorism regimes threaten the integrity of the EU’s internal market. Cash payments will be capped at EUR 10,000 across the EU. The provisional agreement will also better align and make transparent the rules on beneficial ownership. The agreement sets a threshold: in the case of a 25% shareholding or control through other interests, it must be deemed a beneficial owner.

As a next step, the texts must be finalised and submitted to the Permanent Representatives Committee, composed of representatives of the Member States, and the European Parliament for approval. If approved, the Council and Parliament will have to formally adopt the texts, which will then be published in the Official Journal of the EU and enter into force.