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FameEX Hot Topics | European Parliament Approves Tighter Measures to Combat Money Laundering and Terrorist Funding

2023-04-03 16:43:25

Recently, the European Union (EU) lawmakers approved a trio of draft legislations as part of the Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) package. This includes forming a new enforcement agency, imposing a €1,000 ($1,088) limit on anonymous digital currency transactions, and banning citizenship by investment programs, known as "golden" passports and visas.

The three endorsed drafts encompass:
The EU "single rulebook" regulation, which encompasses customer due diligence provisions, transparency of beneficial ownership, restrictions on anonymous instruments like digital assets, and a ban on "golden" passports and visas. This draft garnered 99 votes for, 8 against, and 6 abstentions.
The 6th Anti-Money Laundering Directive, focusing on supervision and Financial Intelligence Units for promoting EU-wide information sharing on AML/CTF matters. The text received 107 votes for, 5 against, and no abstentions.

The regulation that establishes the European Anti-Money Laundering Authority (AMLA), an entity possessing supervisory and investigative powers to ensure AML/CFT compliance. This draft was adopted with 102 votes for, 11 against, and 2 abstentions.

AMLA is seen as the centerpiece of the legislative package, aiming to transform AML/CFT supervision within the EU by providing a central authority that coordinates national authorities and enhances analytical capacity regarding illicit money and asset flows.

A key element of the "single rulebook" bill is the €1,000 ($1,088) cap on anonymous digital asset payments, and the draft also proposes restricting cash transactions to €7,000 ($7,613) when the sender's identity cannot be ascertained. Eva Maria Poptcheva, co-rapporteur for the Anti-Money Laundering Authority, emphasized the significance of the new measures: "The EU's hands-off approach towards dirty money has only yielded scandals. The time has come for a crackdown. AMLA is the game-changer we needed, and with it, the EU can end the economic nationalism that has fueled this laundromat."

Upon enforcement, the new AML/CFT rules and AMLA will apply to the entire digital asset sector in Europe, obligating all crypto-asset service providers (CASPs) to perform extensive due diligence on their customers. The AML/CFT package was first proposed in July 2021, and the EU agreed on its initial position in December 2022, followed by trialogue negotiations with the European Parliament. The draft AML/CFT bills provide insight into the EU's current perspective on digital assets, with the comprehensive Markets in Crypto Assets (MiCA) regulation scheduled for its final vote in April. MiCA includes new classifications for different digital assets, tailored regulatory regimes, proof-of-funds requirements for stablecoin issuers, and a mandate for companies seeking to issue digital assets to publish a project white paper.

MiCA regulation is anticipated to pass its vote and likely take effect in early 2024.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.

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