The European Commission recently adopted two proposals to reinforce the EU's existing rules on anti-money laundering and fund transfers. The Commission believes that, as the threats associated with money laundering and terrorist financing are constantly evolving, regular updates of the rules are required.
What is money laundering?
Money laundering is defined by HMRC as:
the exchange of “money or assets that were obtained criminally for money or other assets that are 'clean'. The clean money or assets don't have an obvious link with any criminal activity. Money laundering also includes money that's used to fund terrorism, however it's obtained.”
A series of regulations are in force in the UK to deal with money laundering here, and these implement the Third EU Money Laundering Directive.
EU Proposals
The European Commission has been reviewing the Directive, and has now put forward a package of measures to reinforce the current regime. These include:
- A Directive on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing;
- A Regulation on information accompanying transfers of funds to secure "due traceability" of these transfers.
Risk-based approach
According to the Commission, the measures will provide for a more targeted and focused risk-based approach.
In particular, the new Directive:
- improves clarity and consistency of the rules across the Member States by:
- providing a clear mechanism for identification of beneficial owners;
- improving clarity and transparency of the rules on customer due diligence; and
- and by expanding the provisions dealing with politically exposed persons.
- extends its scope to address new threats and vulnerabilities by ensuring, for instance, a coverage of the gambling sector (the former directive covered only casinos) and by including an explicit reference to tax crimes.
- promotes high standards for anti-money laundering by going beyond the Financial Action Task Force requirements. It does this by bringing within its scope all persons dealing in goods or providing services for cash payment of €7,500 or more.
- strengthens the cooperation between the different national Financial Intelligence Units whose tasks are to receive, analyse and disseminate to competent authorities reports about suspicions of money laundering or terrorist financing.
Reinforce sanctioning powers
According to the Commission, the two proposals should reinforce the sanctioning powers of the competent authorities by introducing such things as a set of minimum principle-based rules to strengthen administrative sanctions and a requirement for them to coordinate actions when dealing with cross-border cases.
"Dirty money has no place in our economy, whether it comes from drug deals, the illegal guns trade or trafficking in human beings,” said Home affairs Commissioner Cecilia Malmström. “We must make sure that organised crime cannot launder its funds through the banking system or the gambling sector.”
Money Laundering Lawyers London
For specialist legal advice regarding the new EU money laundering laws or for criminal defence against money laundering charges or investigations, please contact Jeffrey Lewis or Siobhain Egan on 020 7387 2032 or complete our online enquiry form here.
