Another step closer to stronger rules to combat EU money laundering

Věra Jourová, EU Commissioner for Justice, Consumers and Gender Equality, has today welcomed the endorsement by the General Affairs Council of the political agreement on the anti-money laundering package. "Today's endorsement in Council marks another step closer to stronger rules to combat money laundering and terrorist financing. In light of the recent events in Paris, and the development of a European Agenda for Security, it is crucial that these rules become law as soon as possible," Věra Jourová said in a statement today.

The 4th AML Directive is set to enhance the effectiveness of the EU legislative framework (currently regulated under the 3rd AML Directive) and implement international standards from the Financial Action Task Force (FATF) that were revised in 2012. Some of the main changes include:

  • It upgrades existing rules on customer due diligence to be applied by banks and certain non-financial entities (i.e. identification and verification of customers, ongoing monitoring and reporting of suspicious transactions).
  • It further enhances the risk-based approach which allows focusing resources on areas of greater risk of money laundering or terrorist financing. 
  • It reinforces cooperation arrangements between Financial Intelligence Units and clarifies cross-border AML supervisory arrangements. The new Funds Transfer Regulation revises the provisions on the information accompanying transfers of funds to ensure due traceability.

Following the recent terrorist attacks in Paris, the Council and the Commission agreed on highlighting the need to take decisive actions against terrorist financing. To enhance the efficiency of the new AML rules, the two institutions call for further efforts towards speeding up national implementation of those rules, strengthening cooperation on terrorist financing between the financial intelligence units of Member States, and addressing terrorist financing risks via the EU supranational risk assessment.

It is also of utmost importance that coordinated action at international, European and national level to tackle terrorist financing is as effective as possible. The Council and the Commission will be examining further actions in the context of the upcoming European agenda on security.

Next steps                                     The text is agreed at political level by the co-legislators. Formal adoption by the European Parliament Plenary is due to take place in April. Following final revision by lawyer-linguists, publication in the Official Journal is expected around June 2015. The Commission will guide Member States over the coming months to implement the Directive into national law. The period for implementation is two years. Background

The Commission adopted its proposals in February 2013 (IP/13/87 Choose translations of the previous link and MEMO/13/64 Choose translations of the previous link). The package consists of two legal instruments:

  • A directive on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing;
  • A regulation on information accompanying transfers of funds to secure "due traceability" of these transfers.

Both proposals fully take into account the 2012 Recommendations of the Financial Action Task Force (FATF) (see MEMO/12/246 Choose translations of the previous link), the international anti-money laundering body, and go further in a number of fields to promote the highest standards for anti-money laundering and counter terrorism financing.

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