AML Package

In July 2021, the European Commission published an ambitious package of legislative proposals to strengthen the EU’s anti-money laundering rules. To do this there are four legislative proposals: 

  • AMLR Proposal: Regulation on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing. This proposal seeks to create a single rulebook for AML in the UK, for the main part upgrading the current Directive to a Regulation but also adding other significant changes.
  • AMLA Proposal: Regulation on establishing the European Authority for Countering Money Laundering and Financing of Terrorism, amending Regulations (EU) No 1093/2010, (EU) 1094/2010 and (EU) 1095/2010. This proposal seeks to create a new AML Authority that will consolidate efforts for full and effective oversight of AML in the EU and remove this competency from the EBA.
  • AMLD 6 Proposal: Directive on the mechanisms for the prevention of the use of the financial system for the purposes of money laundering or terrorist financing and repealing Directive (EU)2015/849. This proposal will provide greater guidance to member states to the regulation.
  • Crypto Transfer of Funds: Amendments on Regulation on information accompanying transfers of funds and certain cryptoassets (recast). The EU’s implementation of the travel rule which will mandate Virtual Asset Service Providers to collect and make accessible data concerning originators and beneficiaries of the transfer of cryptoassets.
April 2024 European Parliament

The European Parliament has adopted a package of laws strengthening the EU’s toolkit to fight money-laundering and terrorist financing.

January 2024 Council of the European Union / European Parliament

The Council and Parliament reached a provisional agreement on parts of the anti-money laundering package that aims to protect EU citizens and the EU's financial system against money laundering and terrorist financing. 

The provisional agreement includes measure to expand the list of obliged entities to new bodies. The new rules will cover "most of the crypto sector, forcing all cryptoasset service providers (CASPs) to conduct due diligence on their customers. This means that they will have to verify facts and information about their customers, as well as report suspicious activity."

According to the agreement, "CASPs will need to apply customer due diligence measures when carrying out transactions amounting to €1000 or more. It adds measures to mitigate risks in relation to transactions with self-hosted wallets."

The Council and Parliament also introduced specific enhanced due diligence measures for cross-border correspondent relationships for cryptoasset service providers.

December 2023 Malta Financial Services Authority

The Malta Financial Services Authority published 'Strengthening Europe’s AML/CFT Supervision' by Kenneth Farrugia, Chief Executive Officer.

The article first appeared in Views – The Eurofi Magazine

July 2023 European Banking Authority

The European Banking Authority published its fourth Opinion on the risks of money laundering and terrorist financing affecting the European Union’s financial sector.  It also sets out what competent authorities and EU co-legislators can do to mitigate those risks.

The Opinion is issued against the background of a changed risk landscape, which has an impact on institutions’ AML/CFT compliance and competent authorities’ approaches to supervision. Examples include geopolitical events such as Russia’s invasion of Ukraine and legislative developments like  the publication of a comprehensive ‘AML Package’ and the Markets in Crypto-Assets Regulation (MiCA). They also include emerging risks such as corruption, and the laundering of proceeds from both environmental crime and cybercrime.

July 2023 Commission de Surveillance du Secteur Financier (CSSF)

Commission de Surveillance du Secteur Financier published a communication 'Regulation on Markets in Crypto-Assets (MiCA) and Regulation on information accompanying transfers of funds and certain cryptoassets'.

June 2023 Council of the European Union / European Parliament

On 9 June 2023, the Market in Crypto Assets Regulation (MiCA) was published in the Official Journal of the European Union as Regulation (EU) 2023/1114. The updated transfer of funds regulation, which will cover cryptossets, was published as Regulation (EU) 2023/1113. 

MiCA will enter into force on 29 June 2023 and will apply from 30 December 2024. However, the regulation will apply to e-money tokens and asset-referenced tokens from 30 June 2024.

The new transfer of funds regulation will also enter into force on 29 June 2023 and apply from 30 December 2024. 

June 2023 Guernsey Financial Services Commission

The Guernsey Financial Services Commission published a consultation paper on the proposed additional rules and guidance for virtual asset service providers and specified businesses with a connection to, or involvement with, virtual assets, on how to meet the requirements of Schedule 3 to the Criminal Justice (Proceeds of Crime) (Bailiwick of Guernsey) Law 1999 and rules in the Handbook on Countering Financial Crime and Terrorist Financing.

The draft rules and guidance include specific information requirements on originators and beneficiaries of virtual asset transfers and the information requirements on virtual asset transfers of £1,000 (or equivalent value) or less, as indicated in the draft legislation.

Licensed VASPS are required to meet all the provisions within Schedule 3 and the associated rules in the Handbook. The chapter has guidance on how VASPS can apply a risk-based approach and comply with customer due diligence and enhanced customer due diligence measures.

This chapter also includes additional risk factors specific to virtual assets to help VASPs and other licensees which are not licensed as a VASP, but which have business connected to virtual assets, to identify, understand and mitigate specific risks attached to virtual assets when dealing with customers where there is a virtual asset connection.

See the draft legislation here.

See the proposed chapter on virtual sssets here.

The consultation also seeks comments on proposed additional rules and guidance for trustees of trusts and partners (excluding limited partners) of partnerships and limited partnerships without legal personality to hold information on the identity of other regulated agents and service providers to a trust or partnership, and disclose their status as trustee or partner. These rules will apply to licensed trustees and licensed partners.

Deadline for responses is 3 July 2023..

May 2023 Council of the European Union

On 16 May 2023, the EU Council formally adopted the Markets in Crypto Assets Regulation (MiCA) and also the Regulation of the European Parliament and of the Council on information accompanying transfers of funds and certain cryptoassets and amending Directive (EU) 2015/849 (recast).

MiCA puts in place a comprehensive EU level legal framework for cryptoasset issuers and service providers including compliance with the anti-money laundering rules. The new rules cover issuers of utility tokens, asset referenced tokens and stablecoins. It also covers service providers such as trading venues and the wallets where cryptoassets are held. This regulatory framework aims to "protect investors, preserve financial stability, while allowing innovation and fostering the attractiveness of the cryptoasset sector."

The updated rules regarding transfers of funds extends the scope of the rules to transfers of cryptoassets. This ensures "financial transparency on exchanges in cryptoassets and provides the EU with a solid framework that complies with the most demanding international standards on the exchange of cryptoassets, ensuring that these are not used for criminal purposes." 

Under the new rules, cryptoasset service providers are obliged to collect and make accessible certain information about the sender and beneficiary of the transfers of cryptoassets they operate, regardless of the amount of cryptoassets being transacted. This ensures the traceability of cryptoasset transfers in order to be able to better identify possible suspicious transactions and block them.

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