Money Laundering and the efforts of governments to combat it and increase transparency and reporting of ownership globally continue to be a hot topic.
One body that has been looking at this area is the European Union, which is in the process of launching its new Anti-Money Laundering (AML) Package 2021.
This package was explored in detail at a recent webinar hosted by Anti-Money Laundering Europe (AME). The main objectives of the Package are to support:
- Greater harmonisation of transposing EU AML and countering the funding of terrorism (CFT) law into national law,
- Greater supervision at EU level, and
- Better coordination of financial intelligence units (FIUs).
Paolo Panico TEP, Chair of STEP Europe, chaired the panel, which comprised:
- Steve Ryan, Deputy Head of Unit D2, DG FISMA at the European Commission
- Endija Springe, Policy Expert at the European Banking Authority (EBA), and
- Anabela Santos, Technical Consultant at the Portuguese Chartered Accountants Association.
The panel discussed the European Commission’s new AML Package 2021, which delivers on the Commission’s action plan of 7 May and was put forward on 20 July for discussion by the European Parliament and Council. The EU’s intention is to achieve the Package through regulation, a new directive and a new AML authority.
These rules will include customer due diligence, harmonised beneficial ownership requirements and clear reporting obligations. There would be further alignment with the Financial Action Task Force (FATF), with the EU also creating a black list and grey list (as FATF does). A listing by FATF will also now trigger an EU listing and obligatory enhanced due diligence (EDD) and countermeasures proportionate to risks stemming from the relevant country.
The announcement of the Sixth Anti-Money Laundering Directive, ((EU) 2018/1673) or AMLD6, is another part of the Package. The Directive will have stronger mechanisms at national level and will:
- Govern the tasks and powers of supervisors
- Give public oversight over self-regulatory bodies
- Have joint analysis of Financial Information Units (FIUs), and
- Grant powers for beneficial ownership registers to carry out checks and issue sanctions.
The other part of the Package was the new AML authority (AMLA), which aims to transform the landscape of AML/CFT supervision in the EU and will come into force in 2024. It will do this by:
- Establishing a single integrated system of AML supervision across the EU based on common supervisory methodologies
- Directly supervising some of the most risky institutions, and
- Supporting cooperation and joint analyses by national FIUs and facilitating communication among them.
It was reported that the new regulations and AMLD6 will only start to apply in 2026 as the AMLA needs to be up and running to prepare regulatory technical standards that will complete the single rule book.
The EBA gave its support for the new framework and proposal, and asked that the Commission try to avoid silos, balance greater harmonisation with a risk-based approach and ensure effective and efficient governance of the AMLA.
Delegates also heard that a lot of work needs to be done to create effective infrastructure and avoid it being seen as a burdensome bureaucracy.