EU strengthen AML/CFT measures

The European Parliament Committee on Economic and Monetary Affairs (ECON) and the Committee on Civil Liberties, Justice and Home Affairs (LIBE) on March 28, 2023, adopted their joint position on three pieces of draft legislation on the financing provisions of EU Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) policy.

Key takeaways:

Prevention of money laundering and terrorist financing

Members of the European Parliament (MEPs) seek to establish a cap on payments for goods and services using cash (€7000) and crypto asset transfers (€1000) in case the customer cannot be identified.

Given the manifest risk of misuse by criminals, MEPs want to ban any citizenship by investment schemes (“golden passports”) and impose strong AML controls on the residence by investment schemes ("golden visas”).

Beneficial ownership definition

MEPs strive to lower the percentage defining beneficial owners from currently 25 percent plus one share/voting right) to 15 percent plus one share/voting right.

The percentage would be further decreased to 5 percent for companies in the extractive industry or companies considered to be exposed to a higher risk of money laundering or terrorist financing.

Beneficial ownership (BO) register and access to BO information

The MEPs suggest that information on BO held in national central registers should be digitally available in the EU official languages as well as in English, and should include current and historical information for a defined period.

Following the Judgment of the Court in Joined Cases C-37/20 | Luxembourg Business Registers and C-601/20 | Sovim, MEPs decided that persons with a legitimate interest, such as journalists, reporters, any other media, civil society organizations, higher education institutions, should be able to access the register, including the interconnected central registers. Their access right will be valid for at least two and a half years. Member states will automatically renew access but also revoke it or suspend it if it is abused.

Next steps

The European Parliament will be ready to start negotiations on the AML/CFT package after a confirmation during a plenary session in April.

More details can be found under “New EU measures against money laundering and terrorist financing”