As expected the European Commission is continuing on the unoriginal path it is walking in regard of anti-money laundering (AML) and countering terrorist financing (CFT). It keeps believing in the highly inefficient one-size-fits-all systems, that cause a heavy burden for the ‘obliged entities’ and that are impracticable even for large companies such as banks. It is bringing near a surveillance society in which every citizen and organisation/company is eyeing its relations with suspicion. Discriminatory practices will increase.
The proposals contain many fundamental changes, e.g. to the beneficial ownership rules that will also apply to certain non-EU legal entities and the harmonisation of identification of beneficial owners. One of the major flaws in the concepts, is that legislation is changing too quickly and that obliged entities are unable to follow and implement these changes.
Interestingly the Commission tries to sell the new rules to obliged entities, saying the new proposals will ease AML/CFT compliance for obliged entities, which is of course not true.
It looks as if the quay will have to turn the ship.
- Press release ‘Beating financial crime’
- Page on the package
- Draft AMLAR: Proposal for a Regulation establishing the European Authority for Countering Money Laundering and Financing of Terrorism
- Draft AMLR: Proposal for a Regulation on the prevention of the use of the ﬁnancial system for the purposes of money laundering or terrorist ﬁnancing (Anti-Money Laundering Regulation)
- Draft AMLD6: Proposal for a Directive on the mechanism for the prevention of the use of the ﬁnancial system for the purposes of money laundering or terrorist ﬁnancing and repealing Directive (EU)2015/849
- Draft revision of the TF regulation: Proposal for a Regulation on information accompanying transfers of funds and certain crypto-assets (recast)
In the media only some aspects of the proposals were covered, like the EU-wide limit of €10,000 on large cash payments, that might cause major problems in those EU-countries that do not have advanced payment-systems like the Netherlands. Journalists do not seem aware that Europe is preparing a surveillance society.
Addition 13 August 2021
Comments Ian Ross on LinkedIn on FATF post regarding beneficial ownership:
Creating lists for the sake of creating lists. Out of date in no time. Creating an eternal compliance management process of chasing information and changes to companies ownership structures that is never verified (time? resources?). Companies House, the UK ’s biggest professional enabler may as well not exist; they have allowed thousands to slip through the net with no chance of any investigation (and how much money have those companies laundered via the UK)?
Lists that hide the guilty amongst the innocenent, no metrics of why a company/owner should be deemed as involved in criminal activity (Panama papers style).. compliance inconsistencies in jurisdictions who understand and apply ‘the lists’ differently. So tick-box due diligence and KYC beckons more than ever.
A so-called ‘international standard’ that is flawed from an organisation barking on about transparency that creates poltically-motivated and biased ‘mutual evaluation reports’. But what is of note that this ‘standard’ will likely bring with it punitive measures, ‘on the watch list’ who don’t kow-tow to the FATF.
Addition 31 December 2021
The thinktank of the European Parliament has published Proposal for a regulation to fight money laundering and counter terrorist financing [EU Legislation in Progress].
Addition 10 May 2022
Read my article EU’s Iron Fist – Europe authoritarianly steamrolls over national supervisors and obliged entities | AML package, AML, CFT, the concepts are unoriginal but the system is authoritarian.