AML / CFT

On 5 June 2015, the Official Journal of the European Union published the new Anti-Money Laundering and Counter Terrorist Financing regulatory framework in Europe. This comprised a set of two legislative updates that include Directive 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (AMLD IV) and Regulation 2015/847 on information accompanying the transfer of funds.

The new strengthened European Anti-Money Laundering framework aimed to contribute to the fight against terrorist financing and money laundering by helping Financial Intelligence Units from different Member States identify and follow suspicious transfers of money and facilitate the exchange of information, establishing a coherent policy towards non-EU countries that have deficient anti-money laundering and counter-terrorist financing regimes and ensuring full traceability of funds transfers within, to and from the European Union.

Both texts took into account the 2012 Recommendations of the Financial Action Task Force, the International standard-setter in the field, and move beyond on a number of issues to promote the highest standards for anti-money laundering and to counter terrorism financing.

This initiative reinforced sanctioning powers and requirements facilitating co-ordination on cross-border actions via stronger and clearer requirements imposed in relation to both the collection and reporting of data by national authorities and the exchange of information and co-operation between them.AMLD IV required the ultimate beneficial owners of companies and trusts (and other legal arrangements) to be listed in public registers in each EU Member State. In addition, AMLD IV required banks, financial institutions, auditors, lawyers, accountants, tax advisors, real estate agents and others to be more mindful of suspicious transactions carried out by their clients.

On 30 May 2018, the European Parliament announced the adoption of the Fifth Anti-Money Laundering Directive 2018/843 (AMLD V), the latest link in a chain of reforms targeting the elimination of money laundering and terrorist financing. Directive 2018/843 has been effective since 9 July, 2018 and Member States were urged by the EU Council to implement it into national law ahead of the already demanding deadline imposed (10 January 2020).

On 23 October 2018, the European Parliament approved Directive (EU) 2018/1673 on combating money laundering by criminal law. Directive (EU) 2018/1673 expanded the scope of what constituted a criminal offence obliging member states to impose strict sanctions against persons committing such offences. Moreover, Directive (EU) 2018/1673  specified that aiding and abetting, inciting, and attempting to commit offences, are also punishable as criminal offences. In addition, the definition of property derived from criminal activities was extended to include assets of any kind, including electronic or digital assets (e.g., crypto-assets). Member States were required to comply with the Directive (EU) 2018/1673 by 03 December 2020.

AML/CFT 2024 Reforms

On June 19, 2024, the European Union published a groundbreaking package of rules, marking a significant milestone in its fight against money laundering and the financing of terrorism. This comprehensive regulatory framework aims to enhance the effectiveness and consistency of anti-money laundering (AML) and counter-terrorism financing (CFT) measures across all Member States.

The new AML/CFT package consists of three primary elements which are designed to address and rectify the fragmented approach historically caused by varied implementation of AML Directives by different Member States. The new regulations aim to centralise supervision and create a more consistent and cohesive regulatory environment across the EU:

1. The Sixth Anti-Money Laundering Directive (AMLD VI)

• Strengthens the transparency of financial transactions and improves the accountability of financial institutions by ensuring all transactions are traceable and verifiable.
• Implements a risk-based approach tailored to different sectors and types of transactions, allowing resources to be allocated where they are most needed.
• Embraces technological advancements such as digital identities and blockchain technology, providing new tools for verifying identities and tracking transactions in real-time.
• Deepens collaboration between EU Member States to more effectively tackle the cross-border nature of money laundering and terrorist financing.

2. The EU “Single Rulebook” Regulation (AML Regulation)

• Establishes a single EU rulebook for AML and CTF to eliminate loopholes and ensure uniform standards across financial institutions.
• Promotes better coordination and information exchange between Member States and includes provisions for EU-level supervision of AML/CFT activities.
• Adopts specific measures for higher-risk sectors and entities, ensuring due diligence is scaled according to risk levels.
• Expands the scope of existing AML/CFT frameworks to include emerging technologies and financial products such as crypto-assets.

3. The Anti-Money Laundering Authority Regulation (AMLAR)

• Establishes the Anti-Money Laundering Authority (AMLA) in Frankfurt to coordinate national supervisors and ensure uniform application of EU rules.
• Grants AMLA direct supervisory powers over high-risk financial institutions and groups, enhancing the ability to detect and mitigate risks efficiently.
• Fosters greater collaboration among Financial Intelligence Units (FIUs) for more effective cross-border investigations and information exchange.

Financial crime, and in particular Money Laundering, is a severe offence that can lead to serious sanctions. Financial services firms need to be aware of, and mitigate, such risks. MAP S.Platis has extensive knowledge in supporting firms find solutions to Anti-Money Laundering and Counter Terrorist Financing problems. We are committed to our goal of supporting the financial industry with expert guidance and advice on upcoming legislation and guiding our clients through these challenging tasks. Our support can include:

• Consulting and support on AML-related matters;
• Preparation of GAP Analysis reports for compliance with the AML regulatory framework;
• Delivery of training to key compliance personnel in managing financial crime risk;
• Monitoring and assessment of the correct and effective implementation of your practices, measures, procedures and controls, as well as drafting relevant policies tailored to your organisation’s needs;
• Review and assessment of your organisation’s client identification, due diligence procedures and information obtained from clients, and;
• Ad-hoc AML/ CTF health-check reports.

Contact us for more information on how we can assist you.