The Council of the EU has approved new rules to prevent money laundering and terrorist financing, strengthening the protection of the financial system and harmonising standards in Europe. The package includes a regulation toughening the rules for the private sector and a directive strengthening collaboration between national authorities. The new AMLA Authority will supervise the financial sector from 2025. The rules will come into force progressively until 2029.
The Council of the European Union has approved new rules on the prevention of money laundering and terrorist financing (AML/CFT), thereby strengthening the protection of the European Union’s (EU) financial system against this type of crime and harmonising European regulations on these matters.
The new package included the approval of Regulation (EU) 2024/1624 of the European Parliament and of the Council of 31 May 2024 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (hereinafter “Regulation”), and of Directive (EU) 2024/1640 of the European Parliament and of the Council of 31 May 2024 on the mechanisms to be put in place by Member States for the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Directive (EU) 2019/1937, and amending and repealing Directive (EU) 2015/849 (hereinafter “Directive").
Among the most important changes is the fact that the rules for the private sector are now directly applicable in the Member States’ legal systems since they are now part of the text of a European regulation. In terms of the duties applicable to obliged entities, the fulfilment of the duty of due diligence is now more stringent, namely by reducing the minimum threshold for customer identification and verification in occasional transactions from EUR 15,000 to EUR 10,000.
The new Directive – also referred to as the “Sixth Directive” – includes rules on the organisation of national authorities with powers in the field of AML/CFT, with the aim of strengthening collaboration between financial intelligence units (FIUs) and supervisory authorities. The Directive also establishes standardised rules on the licence, registration and good standing requirements applicable to certain entities, including gambling service providers and business service providers. Under the new rules laid down in the latest Directive, EU Member States will also be obliged to disclose information regarding centralised bank account registers, in a further effort to detect and confiscate the proceeds of criminal activity.
The new Regulation shall be applicable three years after its entry into force, i.e. in July 2027, with the exception of some rules that will only apply from July 2029. As far as the Directive is concerned, Member States have two to three years to transpose the various European rules into their national legal systems.
The most recent package of European rules also included the approval of Regulation (EU) 2024/1620 of the European Parliament and of the Council of 31 May 2024, which establishes the Anti-Money Laundering and Counter-Terrorist Financing Authority and amends Regulations (EU) no. 1093/2010, no. 1094/2010 and no. 1095/2010. The new Authority, also known as “AMLA” (Anti-Money Laundering Authority), will have direct and indirect supervisory powers over obliged entities in the financial sector, including the power to impose financial penalties. As far as the non-financial sector is concerned, this new authority will provide support and coordinate financial intelligence units. AMLA will be based in Frankfurt and is expected to start operating in mid-2025.
