The European Union already has common rules on preventing money laundering and terrorism financing

New European Union regulatory package against money laundering and terrorism financing was published on 19 June, after approval by the European Council. According to lawmakers, the intention is to harmonise current rules on preventing money laundering and terrorism financing (PMLFT) across the EU.

As explained by experts from finReg360, the rules of the game for entities subject to this regulation are now levelled, which aims to eliminate differences in the applicable regime between Member States and ensure uniform supervision throughout the Union.The published package contains appropriate modifications and new rules of conduct, which entities must become familiar with in order to adapt to the new regulations as part of the adjustment schedule,” they note.

According to their analysts, the package includes various regulations. For example, a regulation that creates a new Office for Combating Money Laundering and Terrorism Financing (AML Authority or AMLA), with regulatory powers, will directly supervise financial entities with the highest level of money laundering and terrorism financing risk, and will exercise indirect supervision over the remaining entities and will have the right to impose sanctions and penalties.

In addition, a regulation that consolidates and unifies the PMLFT rules, now known as “uniform regulation”. This regulation amends the categories of obliged entities by introducing new ones, such as crowdfunding service providers, crowdfunding service intermediaries and football agents and clubs, among others.

As explained by finReg360, Directive on mechanisms to combat money laundering and terrorist financingwhich amends Directive (EU) 2019/1937 and repeals Directive (EU) 2015/849. The new directive is known as the “The Sixth Directive“.

“Directive on access by competent authorities to centralised bank account registers and technical measures to facilitate the use of transaction registers. The new regulatory framework also includes a regulation consolidating the regulation on money transferswhich aims to increase transparency and traceability of crypto-asset transfers (this text was already approved in May 2023 and is known as the Travel Rule),” they add.

Entry into force and application

The new rules, published in the Official Journal of the European Union, enter into force on 9 July 2024. The new European body, which will be headquartered in Frankfurt, will start operating in mid-2025. As finReg360 reminds, The uniform regulation will apply from 10 July 2027, except for agents and football clubs, to which it will apply from 10 July 2029.

On the other hand, Member States must transpose the Sixth Directive by 10 July 2027, with the exception of: Article 74, which must be transposed by 10 July 2025, Articles 11, 12, 13 and 15 by 10 July 2026 and Article 18 by 10 July 2029.