“Each new money laundering scandal is one more scandal and a wake-up call that our work to close the gaps in our financial system has not yet finished,” acknowledges the executive vice president, Valdis Dombrovskis. To tackle the problem of laundering, the European Comission has presented this Tuesday a new legislative package which includes creating a new european authority with powers to directly supervise the situation in the Twenty-seven and coordinate the national authorities, plus control of the cryptoassets sector to guarantee the traceability of all operations with virtual currencies and the establishment of a european limit -of 10,000 euros- for cash payments.
The European Commission considers that there have been important steps in recent years and that European standards are among the strictest in the world but recognizes that greater control and foresight is necessary to ensure effectiveness and plug a hole through which thousands escape of millions each year. “The magnitude of the problem cannot be underestimated. It is necessary to close the loopholes that criminals can take advantage of and today’s package significantly intensifies our efforts to stop the laundering of dirty money in the financial system,” says the financial services police station. Mairead McGuinness. According to Europol data, around 1% of European GDP is related to suspicious financial activity.
Fully operational since 2026
The main novelty of the package focuses on the new Anti-Money Laundering Authority (AMLA in its acronym in English), with powers to coordinate the different national authorities, and whose objective will be to ensure that the private sector correctly and consistently applies European standards, with common methods of supervision and convergence of standards. The agency will also support financial intelligence units with regard to illicit money flows and carry out joint analyzes with them to better detect cross-border movements.
According to Brussels, the AMLA should be operational in 2024 and have a staff by 2026, the year in which it will be fully operational, of 250 people, 100 of them dedicated to directly supervising the entities covered by the regulations. In the financial sector, they propose to directly supervise those entities that operate in a significant proportion of Member States and that have a higher risk profile in several of those Member States, ie. The methodology, however, will be set by the Twenty-seven and the resulting list will be reviewed every three years. The AMLA may also request the European Commission to place a specific entity under direct supervision, regardless of the criteria, if it has indications that they are systematically failing to comply with the requirements and there may be a significant risk in case the national supervisor is unable to take quick and effective measures.
More control over crypto assets
The legislative package also includes a harmonization of the rules. For example, the Commission notes, existing national bank account registers will be connected, providing financial intelligence units with faster access to information on bank accounts and safe deposit boxes, and providing responsible law enforcement authorities with access. to the system, which will speed up financial investigations and the recovery of criminal assets in cross-border cases. The plan also includes expanding the scope of application to include the cryptoassets sector. The reform, which will extend the scope to all service providers, will guarantee full traceability of crypto-asset transfers, such as Bitcoin. The objective is to prevent and detect its possible use as a means of money laundering or terrorist financing. The proposal also prohibits anonymous wallets of crypto assets.
Finally, with regard to cash transactions, Brussels proposes to set a European limit of 10,000 euros for large cash payments by considering them an easy way to launder money. Some two-thirds of the Member States already have limits, although the amounts range from 500 euros in Greece to more than 10,000 euros in the Czech Republic. Hence the Brussels proposal to introduce a ceiling although Member States will be able to maintain lower limits at national level. The proposal includes some exceptions. Individuals who make a private transaction, for example the purchase of a car, if they want to make the payment in cash and the operation is greater than 10,000 euros, they can do it in cash. The new legislative package also includes measures on third countries that pose a threat to the financial system.
Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.