The European Council issued a press release on January 18 declaring that the European Council and Parliament have reached a provisional agreement on certain aspects of a new anti-money laundering package to protect EU citizens and the EU’s financial system.
Stricter Rules Will Affect The Crypto Sector
The provisional agreement is set to improve the organization of national anti-money laundering systems across the EU, closing possible loopholes that could be exploited by criminals, as stated in the press release:
The provisional agreement on an anti-money laundering regulation will, for the first time, exhaustively harmonise rules throughout the EU, closing possible loopholes used by criminals to launder illicit proceeds or finance terrorist activities through the financial system.
The agreement will expand the list of obliged entities, which already includes financial institutions, banks, casinos, and asset management services, to include new bodies such as traders of luxury goods, professional football clubs and agents, and crypto services providers.
The new rules “will cover most of the crypto sector,” as the press release explained, and will force all crypto-asset service providers (CASPs) to “conduct due diligence on their customer.”
Under these rules, CASPs must verify their customers’ facts and information and report any suspicious activity. Consequentially, to mitigate the risk involved with transactions from self-hosted wallets, CASPs will need to apply due diligence measures when a customer is trying to carry out transactions of €1000 (approximately $1090) or more.
The Council and Parliament also introduced “enhanced” measures regarding cross-border correspondent relationships for crypto-asset service providers.
Regarding high-risk third countries, all obliged parties must apply due diligence measures to transactions and business relationships that involve high-risk third countries “whose shortcomings in their national anti-money laundering and counter-terrorism regimes make them represent a threat to the integrity of the EU’s internal market.”
It’s worth mentioning that, under the new set of rules, the Financial Intelligence Unit (FIU) will have “immediate and direct access to financial, administrative, and law enforcement information,” including information on funds transfers and crypto transfers.
European Union’s Efforts Against AML
Over the year, the EU has been working on efforts to regulate crypto services and offer a comprehensive set of rules to watch over the nascent sector.
Most notably, the Markets in Crypto-Assets (MiCA) regulation, which will be fully applied in December of 2024, entered into force in June 2023 after the European Parliament’s vote at the end of 2022. The regulation was designed to maintain financial stability and protect investors in the EU countries.
If approved, the implementation of the AML provision agreement is expected to improve EU countries’ efforts against money laundering and funding of terrorist organizations, as Belgian Minister of Finance Vincent Van Peteghem declared in the press release:
It will improve the way national systems against money laundering and terrorist financing are organised and work together. This will ensure that fraudsters, organised crime and terrorists will have no space left for legitimising their proceeds through the financial system.
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