The Members of the European Parliament (MEPs) have approved new measures to prevent money laundering and terrorism financing (ML/TF) in the European Union (EU).
The three pieces of draft legislation
The draft legislation includes the following:
1️. The EU “single rulebook” which contains regulations related to:
Conducting due diligence on customers
Ensuring transparency of beneficial owners
Regulating the use of crypto assets.
Regulating new entities such as crowdfunding platforms and “golden” passports and visas.
2️. The 6th Anti-Money Laundering (AML) directive which contains national provisions on:
Financial Intelligence Units (FIUs) cooperation
Beneficial ownership registers
Assets stored in free zones
3️. The regulation establishing the European Anti-Money Laundering Authority (AMLA) which will:
Supervise specific credit and financial institutions
Supervise 40 entities with the highest residual risk
Be present in at least two member states.
Banks, asset managers, crypto asset managers, real and virtual estate agents, and high-level professional football clubs will be required to verify their customers’ identities, what they own, and who controls the company.
MEPs have set a limit of €7000 for cash payments and €1000 for crypto asset transfers where the customer cannot be identified.
They also want to ban “golden” passports and impose strong AML controls on “golden” visas.
Beneficial Ownership information across the EU
The new measures require the following:
FIUs and other competent authorities must have access to information on beneficial ownership, bank accounts, and land or real estate registers as part of their investigations.
Member states must also aggregate information on the ownership of goods such as yachts planes and cars worth over €200,000 or goods stored in free zones.
Beneficial ownership means having a 15% plus one share or voting rights or other direct or indirect ownership interest, or a 5% plus one share in the extractive industry or a company exposed to a higher risk for ML/TF.
Beneficial ownership registers must be available digitally and will include current and historical information for a defined period.
The body in charge of the central register will have the right to request any information necessary to identify and verify beneficial owners from corporate and legal entities.
Persons with legitimate interests, such as journalists, reporters, civil society organizations, and higher education institutions should be able to access the register, including interconnected central registers.
The approval of the new measures to prevent money laundering and terrorism financing in the European Union is a significant step towards creating a safer and more transparent financial system. With these measures in place, the EU is better equipped to combat money laundering and terrorist financing, and protect the integrity of its financial system.