Anti-Money Laundering Europe (AME) hosted a webinar on 29 September that was moderated by the chairman of STEP Europe, Paolo Panico TEP.

The event discussed the upcoming European Union (EU’s) anti-money laundering (AML) legislative package to combat the financing of terrorism (CFT).

The event also covered the importance of the involvement of the whole AML ecosystem, including law enforcement, public sector and industry, in the fight against money laundering.

The European Commission (EC) said that the package will include several features:

• The Anti-Money Laundering Regulation (AMLR).
• The 6th AML directive (AMLD6).
• A new Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA).
• The Regulation of transfers of funds and certain crypto assets (TFR).

It is expected that political agreement for the package will be achieved by June 2023. The AMLA is expected to start operating in 2024, with the directive applicable from 2026.

The AMLR will extend the scope of obliged entities and harmonises rules for the private sector.

AMLD6 will create stronger national mechanisms by looking at the tasks and powers of supervisors and financial intelligence units (FIUs), the exchange of information and beneficial ownership registers. It will also:

• Allow joint analysis by FIUs.
• Create AML/CFT supervisory colleges.
• Allow public oversight of self-regulating bodies.

The TFR aims to bring in rules which are in line with the Financial Action Task Force standards. The main changes are:

• Virtual asset service providers (VASPs) must collect information on originators and beneficiaries of crypto assets.
• Transfers involving unhosted wallets will be brought in scope.
• Will remove the EUR1, 000 threshold for simplified information and verification requirements.

The AMLA will aim to create a single integrated system of AML supervision in the EU, which supports coordination of jurisdictions FIUs and will cover 40 risky institutions in the EU. It will also extend the scope of direct supervision to include crypto asset service providers and entities which use the freedom of provision of service.

A member of the panel from the Chartered Institute of Management Accountants called for the need for a single rule book and a balance between increased harmonisation and increasing confidence in AML.

The importance of crypto was highlighted in a recent report¹ which found that transactions involving illicit addresses only represented 0.15 per cent of the crypto transaction volume in 2021. It was still estimated that criminals had laundered USD 8.6 billion worth of crypto assets. However, the report stated that the ability of law enforcement to combat crypto crime had increased with the Internal Revenue Service (IRS) seizing around USD 3.5 billion of illegal crypto assets in 2021.

More information on the event can be found on the AME website: https://www.amleurope.com/post/event-highlights-roundtable-aml-cft-developments-eu-globally

Robert Carington is Policy Executive at STEP

Footnotes:

¹The Chainalysis 2022 Crypto Crime Report, https://go.chainalysis.com/2022-Crypto-Crime-Report.html