EU Parliament Approves More Stringent Rules to Combat Money Laundering and Terrorist Financing

The latest EU Parliament vote approves the formation of a new anti-money laundering authority and imposes a €1,000 ($1,088) cap on anonymous digital asset transactions. 

The latest vote on the AML/CFT bill has imposed a  €1,000 ($1,088) cap on anonymous digital asset transactions and approved a new AMLA (Anti Money Laundering Authority). On Tuesday, EU lawmakers added three new pieces of the draft as part of AML/CFT where they put a cap on anonymous transactions and a ban on citizenship by investment or the so-called “golden” passports and visas.

The three drafts approved were:

The EU “single rulebook” law, which comprises requirements on performing due diligence on clients, transparency of beneficial owners, and the use of anonymous mechanisms, such as digital assets, as well as a ban on “golden” passports and visas; this passed with 99 votes to 8 and 6 abstentions.

The (6th Anti-Money Laundering directive) 6AMLD, which concentrates on conditions for control and Financial Intelligence Units aimed at EU-wide information sharing around AML/CTF matters; the bill was approved 107 votes to 5 and 0 abstentions.

The law forming the European Anti-Money Laundering Authority (AMLA), which will have supervisory and investigative controls to guarantee compliance with AML/CFT essentials; was adopted 102 votes to 11 and 2 abstentions.

The AMLA is represented as the “heart” of the legislative bill, and it’s expected it will “transform AML/CFT supervision in the EU”  by providing a major authority to conform national authorities and enhance analytical power on criminal money/asset flows. A key feature of the “single rulebook” bill is its cap on anonymous digital asset payments at €1,000 ($1,088), and the draft also aims to deny cash transactions at €7,000 ($7,613) when it is not possible to recognise the sender.

Eva Maria Poptcheva, Co-rapporteur for the Anti-Money Laundering Authority and one of the MEPs that will lead the negotiations on the final shape of the bills said of the new measures: “The EU’s hands-off approach towards dirty money has only yielded scandals. The time has come for a crackdown. AMLA is the game-changer we need, and with it, the EU can end the economic nationalism that has fueled this laundromat.”

When they come into power, the AMLA that implements or enforces the new AML/CFT rules, will advance to the whole digital asset sector operating in Europe and oblige all Crypto-Asset Service Providers (CASPs) to perform extensive due diligence on their clients. The AML/CFT package was originally proposed in July 2021, and the EU agreed to its initial position in December 2022; the legislation then moved to trialogue negotiations with the European Parliament.

Mairead McGuinness, Commissioner responsible for financial services, financial stability, and Capital Markets Union, described money laundering as “a clear and present threat to citizens, democratic institutions, and the financial system,” and suggested that the bill “significantly ramps up our efforts to stop dirty money being washed through the financial system,” When the package was announced back in 2021.

The European Parliament will be prepared to start negotiations, after approving this latest set of positions on the AML/CFT package, on the full legislation after a confirmation during a plenary session in April.

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