EU Plans for Overhaul on Anti-Money Laundering Controls

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July 2021 promises to be a big month for those subject to the anti-money laundering rules of the European Union, with the European Commission set to unveil its plans for the overhaul of its system for preventing anti-money laundering and counter terrorist financing.  In a speech presented to the AML Boardroom Series on the 17th May 2021, Commissioner Mairead McGuinness acknowledged that the unveiling had been slightly delayed, attributing this in part to the sheer volume of changes in the soon to be released package.  Emphasising that nothing is yet final, McGuinness outlined the changes which seek to achieve uniformity of anti-money laundering controls across the European Union via two main components.

The first is the greater use of directly applicable regulations, as opposed to directives which require member states to transpose their requirements into domestic law.  This has not routinely happened across the European Union.  The upcoming regulations are likely to contain more detail on customer due diligence and beneficial ownership, and a limit of €10k to be placed on cash purchases.

The second main component of the package is the creation of a new anti-money laundering authority with direct, cross-border supervisory powers, likely to be funded in part by fees from obliged entities. The date set for the operation of this authority is 2026.  McGuinness emphasised that enforcement is a priority for the Commission, and on this basis it can be expected that the authority will have appropriate powers and will be proactive in their application.

Firms based in the European Union are faced with significant changes and will need to prepare to adjust to these.  Those in the United Kingdom would be sensible to follow the developments in Europe closely, and time will tell to what degree they inform the evolution of the UK’s own anti-money laundering rules.

Plenitude Consulting supports a broad range of financial institutions with identifying and proactively addressing their regulatory obligations to reduce their financial crime risk exposure. We offer RegSight, a cloud-based obligations register, which is an effective way to manage your financial crime obligations. If you would like to know more, please reach out to our team at enquiries@plenitudeconsulting.com

Stephen Rowland

Manager

Stuart Phillips

Senior Manager

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