The long awaited AML/CFT package of the European Commission was released on 20 July 2021, with four legislative proposals:
- A Regulation establishing a new EU AML/CFT Authority
- A Regulation on AML/CFT, containing directly-applicable rules, including in the areas of Customer Due Diligence and Beneficial Ownership
- A sixth AML/CFT Directive (the AML Directive6 ), which replaces the existing Directive 2015/849/EU. It contains provisions that will be transposed into national law, such as rules on national supervisors and financial intelligence units in Member States.
- A revision of the 2015 Regulation on Transfers of Funds to trace transfers of crypto-assets (Regulation 2015/847/EU).
While the legislative proposals aim to harmonise certain fundamental principles of the current AML/CFT framework, they also seek to address the shortcomings identified in recent years, notably by strengthening communication and coordination between the private sector and public authorities. To this end, the European Commission has chosen a directly applicable European regulation to govern certain key AML/CFT professional obligations for all obliged entities in the European Union.
A level playing field in the EU for AML/CFT
In order to create a level playing field between all financial actors in the EU in the application of their AML/CFT obligations, national legislators should not be able to go beyond the future harmonised EU rules by adopting additional specific rules on top of those provided for in the AML Regulation. This would indeed confuse future EU standards and lead to further divergence in AML/CFT professional obligations between Member States.
In the same vein the European Commission proposes the set-up of an independent AML Authority (AMLA) that should further harmonize rules applicable throughout the European Union. This is probably the most visible and political part of the package. Issues around powers, governance and location are likely to capture the political debate in the Council as well as in the European Parliament and later on between them.
- In the Council, Member States have already had initial exchanges and are preparing for a two-day working session at the end of the month.
- In the European Parliament, the key rapporteurship roles have yet to be assigned and work will start a little later.
The legislative process can be expected to last well into 2022.
By Julien Leroy and Antoine Kremer