Understanding the EU's AML Package

In July 2021, the European Commission launched the so called “AML package” to bolster the EU's defenses against money laundering and terrorist financing.

At the core of the AML Package are four key legislative proposals:

1. Regulation establishing the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA):

   - AMLA will coordinate national authorities to ensure consistent application of AML/CFT rules across Member States;

   - AMLA will have the authority to directly supervise certain high-risk financial entities, including those involved in crypto-assets;

   - AMLA will support the cooperation among Financial Intelligence Units (FIUs).

2. Regulation on the prevention of the use of the financial system for money laundering or terrorist financing (AMLR):

   - Due diligence for CASPs in international partnerships, institutions with wealthy account holders, and transactions in high-risk areas;

   - €10,000 limit on cash transactions, with Member States able to set stricter caps; identification required for €3,000 to €10,000 cash deals.

3. Directive on the prevention of the use of the financial system for money laundering or terrorist financing (AMLD6):

   - Strengthened beneficial ownership register rules;

   - Empowerment of Financial Intelligence Units (FIUs) with broader authorities, enhanced collaboration capabilities, and obligations to uphold fundamental rights;

   - Defined enhancement and clarification of the supervisory bodies' roles, including their powers and responsibilities;

   - Implementation of risk assessment protocols at EU and national levels, including targeted recommendations from the Commission to Member States.

4. Regulation on information accompanying transfers of funds and certain crypto-assets (Recast of Regulation 2015/847/EU):

   - Traceability rules for crypto-asset transfers, mandating that service providers gather and exchange information on transaction originators and beneficiaries;

   - Enhanced due diligence for transactions involving high-risk countries.

   
   

   Current status:

   On 17 January 2024, the EU Council and Parliament reached a political agreement on 3 of the 4 AML package acts, excluding the Recast of Regulation 2015/847/EU. If the Parliament adopts its first reading position as proposed, the Council will approve it, leading to the swift adoption of these acts.