The EU's AML Reform: Addressing Financial Crime

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The European Union (EU) has recently undergone a significant reform on Anti-Money Laundering (AML) regulations. This reform was in response to a series of scandals involving banks being fined for serious failures. The EU's AML reform is a plan to tackle financial crime across the union.

The AML package consists of four main elements:

AML Authority

The EU introduced a regulation creating the AML Authority in Europe, which will supervise the most important financial institutions across the union, including big banks and insurance companies.

New AML Directive

The EU introduced a new AML directive, the sixth, which will give more powers to Financial Intelligence Units (FIUs) and National Supervision Authorities across member states.

Basic Rules of Conduct

For the first time, the EU will lay down basic rules of conduct across the entire 27 block. There will be common rules on customer due diligence and beneficial ownership, to harmonize the approach taken by Financial Institutions (FIs) to how they manage and handle risk linked to their customers.

Regulation on Transfers of Crypto Assets

The fourth element of the AML package is about reforming the current regulation on transfers of crypto assets. The purpose is to ensure full transparency of beneficiaries and senders of funds for crypto to combat money laundering through crypto assets.

UK's AML Reform

Although the UK is no longer a part of the EU, it has also done a lot to reform its AML systems. The UK parliament recently issued the Economic Crime Corporate Transparency Bill in September 2022. This bill will reform Companies House by giving it more powers than before to check information for accuracy and authenticity. The misuse of UK legal entities and partnerships for money laundering is a major problem in terms of combating financial crime nationally.

In summary, the EU's AML reform is a response to recent scandals involving banks being fined for serious failures. The reform includes the introduction of the AML Authority, a new AML directive, basic rules of conduct, and a regulation on transfers of crypto assets. The UK has also issued the Economic Crime Corporate Transparency Bill to reform its AML systems. These measures aim to combat financial crime and promote transparency in the financial sector.

Morten Kriek is the founder of?Wisselbanck ??, co-founder of?The Banking 50, and holds a Masters Degree in Positive Leadership and Strategy from?IE Business School?in Madrid. He also completed on-campus executive programs at some of the world's leading business schools including?Columbia Business School,?Yale School of Management,?The Tuck School of Business at Dartmouth?and?Cornell Johnson Graduate School of Management. Morten is also a certified Positive Psychology Coach from the?Wholebeing Institute.