European Parliament Has Agreed on Harmonized Mechanisms to Combat Money Laundering and Terrorist Financing

On January 18, European Parliament MEPs agreed with the Council new measures to develop an EU toolkit against money laundering, terrorist financing and sanctions evasion.

Parliament and Council concluded a provisional agreement on the sixth Anti-Money Laundering (AML) directive and the regulation “Prevention of the use of the financial system for the purposes of money laundering or terrorist financing” (referred to as the “EU single rulebook”). These agreed acts implement Pillar 2 of the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) package (establishing the set of single rules on AMF/CFT control across the EU). They will be applied by banks and other obliged entities to protect the EU internal market.

The new rules set out how to obtain access to beneficial ownership information and give more powers to financial intelligence units to analyze and detect money laundering and terrorist financing cases, as well as to suspend suspicious transactions. They also include guidelines concerning ultra-rich individuals.

The deal includes a European Union-wide limit for traders on large cash payments of EUR 10 000 for a single purchase and measures to ensure compliance with targeted financial sanctions and mechanisms which control the avoidance of sanctions (transactions between individuals are not included in this clause).

Other matters covered by the proposal include: internal control policies and procedures, due diligence of customers, politically exposed persons, third countries policy, reporting obligations, and data protection.

The draft awaits for the first reading and shall be officially approved by the Parliament and Council prior to its entering into force.

Press release

Regulation “Prevention of the use of the financial system for the purposes of money laundering or terrorist financing”