Progress For EU AML Package After Committee Approval

March 29, 2023
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Parliamentary committees leading on the EU’s new anti-money laundering (AML) package have adopted a position that can be voted on by their colleagues next month.

Parliamentary committees leading on the EU’s new anti-money laundering (AML) package have adopted a position that can be voted on by their colleagues next month.

Members of the European Parliament (MEPs) have approved stricter rules to combat money laundering, terrorist financing and sanctions evasion.

“Today's votes mark the beginning of the end for criminals, terrorists, oligarchs, art ‘enthusiasts’ and crooked football agents; for all those who have been at the centre of money laundering scandals for the past 30 years,” said Damien Carême, a Green MEP. “Until now, because of loopholes in European legislation, the EU was fertile ground for these people to hide their ill-gotten money.”

The MEPs, who sit on the EU’s Economic and Monetary Affairs, and the Civil Liberties, Justice and Home Affairs committees adopted their position on three pieces of draft legislation on the financing provisions of the EU Anti-Money Laundering and Countering the Financing of Terrorism (AML/CTF) policy.

These are the EU's first single rulebook regulation for AML/CTF, its sixth directive and a regulation that mandates the creation of a pan-EU AML body.

“Money laundering has been on top of the political agenda for many years, yet we seem to be losing the battle against this type of crime, which is the facilitator for many other forms of crime,” said Paul Tang, an MEP sitting with the Socialist and Democrats faction of the parliament.

Tang, a Dutch MEP, said that sanctions implemented in light of Russia’s invasion of Ukraine have increased scrutiny, proving how difficult it is for police to find out the ultimate beneficial ownership of companies and high value goods.

To restrict transactions in cash and crypto-assets, MEPs state in the adopted text that they want to cap payments that can be accepted by persons providing goods or services.

MEPs have set limits of up to €7,000 for cash payments and €1,000 for crypto-asset transfers where the customer cannot be identified.

Meanwhile, entities such as banks and crypto-assets managers, will be required to verify their customers’ identity, what they own and who controls the company.

These entities will also have to detail the types of risk of money laundering and terrorist financing in their sector of activity, and transmit the relevant information to a central register.

MEPs have also stated that they want to ban any citizenship by investment schemes — so-called golden passports — and impose strong AML controls on residence by investment schemes.

Parliamentarians also want to expand the role of the EU’s proposed Anti-Money Laundering Authority (AMLA).

In their position, the politicians have said that they wish to extend the agency’s competence to drawing up lists of high-risk non-EU countries.

“Until now, the EU’s hands off approach to dirty money has only yielded scandals,” said Eva Maria Poptcheva, a Spanish MEP sitting with the centrist Renew wing of the European parliament.

“The time has come to crack down on it and the EU must be bolder than ever if it wants to put an end to its complicity towards illicit finance.”

MEPs also want to give the AMLA the powers to mediate between national financial supervisors and settle disputes, supervise and investigate the national implementation of the single AML rulebook, ensure stronger oversight of the supervisors in the non-financial sector, and receive whistleblower complaints.

The agency’s hotly debated headquarters, meanwhile, will be decided during the negotiations between the European Parliament and Council.

Cities including Madrid, Rome and Frankfurt have expressed an interest in hosting the AMLA.

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