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EU Agrees on Stricter Anti-Money Laundering Rules



March 11, 2024 - In a landmark move to fortify its financial systems against illicit activities, the Council of the European Union and the European Parliament have recently reached a provisional agreement on robust reforms to enhance the EU's anti-money laundering (AML) and counter-terrorism financing framework.  

 

As the payments landscape evolves, it's crucial for businesses to stay ahead of the curve. At Intercash, we pride ourselves on being at the forefront of the latest AML policies. Our clients can rest assured that all their transactions are meticulously vetted, ensuring security and compliance at every turn. 

 

You don’t need to be a payments expert to keep up with these policies, but it’s important that we all do our part to combat the potential for criminal activity. In this latest blog from Intercash, we’ll walk you through this important payment news and highlight the key elements of the agreement. 

 

Expanded Scope and Regulations 

The agreement broadens the scope of entities subject to AML and know-your-customer (KYC) obligations. Notably, crypto asset service providers will now be regulated, necessitating them to conduct due diligence on customers and report suspicious transactions exceeding €1,000. Moreover, entities in high-value sectors such as luxury goods, professional football, art and real estate will be subject to new rules. 

 

Cash Payment Limits 

Maximum limits of €10,000 for cash payments are set across the EU, with the flexibility for individual countries to impose lower limits. Entities must identify customers for occasional cash transactions falling between €3,000 and €10,000. 

 

Beneficial Ownership Transparency 

Beneficial ownership transparency is strengthened, requiring entities to understand complex ownership structures. Foreign entities owning EU real estate will now have to register beneficial owners dating back to 2014. 

 

Enhanced Access for Financial Intelligence Units 

Financial intelligence units gain broader access to various government registers, including tax, property and vehicle registers, to analyze suspicious activity reports. Supervisors will oversee compliant sectors through risk-based supervision, with financial institutions facing enhanced due diligence for ties to high-risk nations and corrupted elites. 

 

Comprehensive Money Laundering Risk Assessments 

Comprehensive money laundering risk assessments will be conducted at both EU and national levels. The findings will guide future policy measures, fostering a more proactive and adaptive regulatory approach. 

 

Sectoral Reforms 

In the cryptocurrency sector, all crypto asset service providers, including exchanges, are mandated to implement customer due diligence, verify identities, and report suspicious transactions. Luxury industries, such as metals/gems, art/collectibles and yachts/planes, will be brought under AML rules for the first time. Football clubs and agents, recognized as potentially high-risk, will undergo a five-year phase-in period, with the possibility of low-risk exemptions. 

 

What’s Next? 

The agreement finalizes rules under a new EU AML regulation, concurrently reforming member state supervisory systems through directives. Once approved, these standards are poised to represent the world's most advanced AML measures, according to officials. As finishing touches are applied, the texts will be submitted to EU national representatives and the European Parliament for endorsement.  

 

Widespread implementation is anticipated within a few years, ushering in a significant upgrade to Europe's defenses against illicit financial flows. The commitment to strict supervision and coordination is now deemed essential to protect citizens and uphold financial integrity across the region. 

 

As a leading provider of global payment solutions, Intercash stands ready to deliver AML-compliant services tailored to your unique business needs. Whether in the EU or any other region, get in touch with Intercash today to elevate your payment processes to new heights of efficiency and security. 

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