On 20 July 2021 the EU Commission presented a package to combat money laundering and terrorist financing (AML Package). The AML Package aims to eliminate the different implementation and handling of money laundering regulations in the EU Member States. The aim of the AML Package is a full harmonisation of money laundering and terrorist financing regulations within the Union and the creation of a single rulebook – similar to banking supervisory law. In addition, a standardisation of the definitions and thus the object-related scope of application should be created. The AML Package consists of the following four components:

The new Anti-Money Laundering Regulation (AMLR)

The current anti-money laundering provisions only regulate certain categories of crypto providers. The new directly applicable regulation[1] aims to harmonise the national anti-money laundering provisions based on the 5th Anti-Money Laundering Directive within the Union as a single EU rulebook. The standardisation of the definitions will be achieved through a reference to the term crypto-asset in the MiCA. The AMLR provides for an EU-wide limit of EUR 10,000 per transaction for cash payments.

Creation of a new EU Authority of Anti-Money Laundering and Countering the Financing of Terrorism (AMLA)

A new regulation[2] is intended to create a separate authority to combat money laundering and terrorist financing. The new Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA) aims to strengthen cooperation between national money laundering authorities and ensure their coordination so that EU anti-money laundering provisions are applied uniformly. The AMLA is intended to directly supervise the highest-risk, highly cross-border credit and financial institutions (selected obliged entities) with regard to compliance. Others will be supervised by the AMLA only indirectly. The AMLA will be set up as of 2023 and will start operating on 1 January 2024.

The 6th Anti-Money Laundering Directive

As the Commission is of the opinion that in some areas it is not expedient to adopt a rule as a regulation, a 6th Anti-Money Laundering Directive[3] is planned, which will leave the Member States a certain degree of flexibility, for example with regard to requirements for national registers of beneficial owners and bank account registers.

Adaption of the EU Funds Transfer Regulation

The EU Funds Transfer Regulation[4] is intended to ensure the full traceability of money transfers. So far, these rules have only applied to payments in form of banknotes, coins, scriptural money and electronic money. A revision of this Regulation is planned to the effect that its scope of application will be extended to the transfer of crypto-assets. In the future, European crypto-asset service providers (CASPs) will have to record complete information on the sender and recipient of each crypto-asset transfer in order to establish the identity of the persons in the crypto-asset transfer (so called travel rule). Also in this Regulation the definitions are aligned with MiCA.

Entry into force, review, scope and conclusion

The AML Package is expected to enter into force in 2025 at the earliest, with Member States having three years after the 6th AML Directive enters into force to implement it. The AMLR will enter into force on the twentieth day after publication in the Official Journal and will only be applicable three years after entry into force.

The AML Package is intended to unify all anti-money laundering and terrorism regulations and make them applicable to all types of crypto-asset providers. Crypto-asset value transfers are to be included in the Money Transfer Regulation by means of the travel rule. A separate authority for combating money laundering and terrorist financing will be established.

Oliver Völkel | Andreas Ramprecht

[1] Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, COM/2021/420 final.

[2] Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL establishing the Authority for Anti-Money Laundering and Countering the Financing of Terrorism and amending Regulations (EU) No 1093/2010, (EU) 1094/2010, (EU) 1095/2010, COM/2021/421 final.

[3] Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the mechanisms to be put in place by the Member States for the prevention of the use of the financial system for the purposes of money laundering or terrorist financing and repealing Directive (EU) 2015/849, COM/2021/423 final.

[4] Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on information accompanying transfers of funds and certain crypto-assets (recast), COM/2021/422 final.

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