On Tuesday, members of the European Parliament (MEPs) from the Economic and Monetary Affairs, as well as Civil Liberties, Justice, and Home Affairs committees, established their stance on three proposed legal frameworks addressing the financing aspects of the EU's Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) policies. The legislative package is comprised of:
The EU "single rulebook" - a regulation encompassing provisions for customer due diligence, transparency of beneficial owners, and the utilization of anonymous tools like crypto-assets and novel entities such as crowdfunding platforms. This also covers aspects related to "golden" passports and visas. The text received 99 votes in favor, 8 against, and 6 abstentions.
The 6th Anti-Money Laundering Directive - a directive featuring national provisions concerning supervision, Financial Intelligence Units, and accessibility for competent authorities to crucial and reliable data, such as beneficial ownership registers and assets in free zones. The text was approved with 107 votes in favor, 5 against, and no abstentions.
The regulation sets up the European Anti-Money Laundering Authority (AMLA), which holds the supervisory and investigative authority to guarantee adherence to AML/CFT mandates. This text was endorsed with 102 votes in favor, 11 against, and 2 abstentions.
Preventing money laundering and terrorist financing
Based on the adopted texts, various entities, including banks, asset and crypto-asset managers, real and virtual estate agents, and top-tier professional football clubs, must verify the identity of their customers, possessions, and the company's controllers. These entities must also identify specific money laundering and terrorist financing risks within their industry sector and convey the information to a central register.
To limit cash and crypto-asset transactions, MEPs aim to establish a maximum amount that providers of goods or services can accept for payments. They have set limits of €7,000 for cash payments and €1,000 for crypto-asset transfers when the customer's identity cannot be verified. Due to the evident risk of criminal exploitation, MEPs seek to prohibit citizenship by investment schemes ("golden passports") and enforce stringent AML controls on the residence by investment schemes ("golden visas").
Financial Intelligence Units
Each member state should create a financial intelligence unit (FIU) to prevent, report, and combat money laundering and terrorist financing. FIUs must exchange information with one another and competent authorities and collaborate with AMLA, Europol, Eurojust, and the European Public Prosecutor's Office.
Beneficial ownership information
National FIUs and other competent authorities must be able to access beneficial ownership information, bank account details, and land or real estate registers to detect money laundering schemes and freeze assets promptly. Recognizing that certain commodities are appealing to criminals, MEPs also propose that member states collect information on ownership of items such as yachts, planes, and cars valued over €200,000 or goods stored in free zones.
MEPs agreed that beneficial ownership is defined as holding 15% plus one share, voting rights, or any other direct or indirect ownership interest, or 5% plus one share in the extractive industry or a company with a higher risk of money laundering or terrorist financing.
Registers for beneficial owners
Data on beneficial ownership stored in national central registers should be digitally accessible, available in an EU official language and English, and include current and historical information for a specified period. The organization responsible for the central register will be able to request any necessary information from corporate and legal entities to identify and verify their beneficial owners. This information must be up-to-date and accessible to FIUs, AMLA, competent authorities, self-regulatory bodies, and obligated entities. Failure to provide accurate and sufficient data to registers will result in penalties. Entities responsible for central registers should be able to use suitable technology for conducting verifications.
Information accessibility
Following the latest Court of Justice ruling, MEPs determined that individuals with a legitimate interest, such as journalists, reporters, media organizations, civil society groups, and higher education institutions, should be able to access the register, including interconnected central registers. Their right to access will be valid for at least two and a half years. Member states will automatically renew access but may also revoke or suspend it if abused. Legitimate interest should apply without discrimination based on nationality, country of residence, or establishment.
Consistent enforcement by AMLA
The new AMLA will monitor risks and threats within and outside the EU, directly supervising specific credit and financial institutions based on their risk level. Initially, it will supervise 40 entities with the highest residual risk profile present in at least two member states, with a minimum of one entity chosen from each member state. To carry out its responsibilities, AMLA can require companies and individuals to provide documents and information, conduct on-site visits with judicial authorization, and impose sanctions of €500,000 - €2 million or 0.5-1% of annual turnover for significant breaches, and up to 10% of the total annual turnover of the obligated entity in the preceding business year.
MEPs' position on the draft law includes extending the agency's competence to create lists of high-risk non-EU countries, giving AMLA the authority to mediate between national financial supervisors and settle disputes, supervise and investigate the national implementation of the single AML rulebook, ensure stronger oversight of supervisors in the non-financial sector, and receive whistleblower complaints. The agency's location will be determined during the Parliament and Council negotiations.
Next steps
Following confirmation during a plenary session in April, the European Parliament will be prepared to start negotiations on the AML/CFT package.
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