The European Union (EU) parliament added new rules to the Anti-Money Laundering (AML) legislation to strengthen their existing measures. The new measures extend AML requirements to multiple sectors, including luxury goods traders, cryptocurrency, and football clubs — and non-compliance can result in criminal proceedings, sanctions, fines, and reputation damage. The rules were added on April 24, 2024.
Let’s explore the new measures in detail.
What are the changes to the EU’s AML laws?
The EU’s AML laws are designed to fight against money laundering and terrorist financing. They ensure obligated entities, such as banks, asset managers or real and virtual estate agents apply the needed customer due diligence requirements when entering into a business relationship.
New updates to AML
The changes in AML in different sectors include:
- Real estate: Foreign companies and trusts that have held real estate in the EU since 2014 are required to record the beneficial ownership registers to get individuals who own and control the companies.
- Cash: An EU-wide limit of EUR 10,000 on cash payments to ultra-rich individuals (with a total wealth of at least EUR 50,000,000).
- Luxury Items: Those trading in these precious items (such as jewelry, cars, and boats) are required to carry checks on their clients when selling items of at least EUR 10,000.
- Fundraising: Crowdfunding platforms are required to check on the project owners and the intended project in detail. Any attempt to misuse crowdfunding should be detected and reported to FIUs.
- Crypto: Cryptocurrency companies must carry out due diligence checks on all customers that are similar to checks carried out on banks and other financial entities.
- Football clubs: Top-tier football clubs nationwide involved in high-value financial transactions will have to verify their customer's identities, player transfers, sponsorships, and investments.
Compliance with the EU's AML laws
To enforce compliance with the new rules, a new authority is set to be established in Frankfurt, and it is called 'the Anti-Money Laundering and Countering the Financing of Terrorism (AMLA). AMLA will supervise the implementation of targeted financial sanctions and make non-complying organizations penalized accordingly.
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