MEPs and the European Council reached a final agreement over further measures to strengthen the European Union’s arsenal against sanctions evasion, money laundering and the financing of terrorism.
The new rules might have a big impact on sports clubs and cryptocurrencies, experts say.
The move on January 18 grants Financial Intelligence Units (FIUs) greater authority to analyse and identify alleged instances of money laundering and terrorist financing, as well as the power to halt “questionable” transactions.
The measures also grant access to “beneficial ownership” information.
Crypto-asset service providers will need to conduct verification procedures for any transactions involving €1,000 or more. Additionally, the rules include further precautions against transactions involving “self-hosted crypto wallets”.
Specific enhanced due-diligence measures for cross-border correspondent relationships regarding crypto-asset service providers are also introduced.
Sellers of luxury cars, aircraft and boats, as well as dealers of precious metals and jewellery, will also need to undertake background checks regarding their clientele.
A spokesperson for the European Parliament told Brussels Signal there is a threshold of €250,000 for cars and €7.5 million for yachts and planes.
Professional football teams and agents are also in the crosshairs. A number of top European football clubs already face potential sanctions violation charges over multi-million euro player transfer deals with Russian clubs.
Member States will have the ability to ease-up on the due-diligence obligations if the teams are seen to pose a “low risk”.
Football clubs not in the highest EU leagues and with a yearly turnover of less than €5 million over two years are exempt.
Entities, or ‘arrangements” associated with persons or entities subject to targeted financial sanctions, will need to be “flagged”.
“Ultra-rich individuals”, with a total wealth of at least €50 million, excluding primary residences, and those offering customised wealth management services to them – such as banks, investment firms and other funders – will be subject to increased “vigilance”.
These individuals were classified as having a higher risk-profile. A €5 million threshold for assets under management was green-lighted by the negotiators.
“This agreement is part and parcel of the EU’s new anti-money laundering system,” said Vincent Van Peteghem, the Belgian Minister of Finance.
“It will improve the way national systems against money laundering and terrorist financing are organised and work together.
“This will ensure that fraudsters, organised crime and terrorists will have no space left for legitimising their proceeds through the financial system,” he said.
Cash payments have a maximum restriction of €10,000 across the EU which, according to the bloc, will make it “more difficult” for criminals to launder money. If necessary, Member States will be able to impose a lower maximum limit.
This cash limit will be extended to payment-service and electronic-money providers. It will not apply to payments between “natural persons” who are not acting in a professional function.
Furthermore, companies that are required to comply will have to ascertain and validate the identity of any individual who conducts “sporadic” cash transactions – ranging from €3,000 to €10,000.
Banks and other relevant entities must implement the agreed regulations, which are a component of the Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) package.
The provisional agreement aims to enhance transparency and standardise regulations on “beneficial ownership”.
It defines that as being through ownership and control, and sets a 25 per cent threshold, addressing “multi-layered structures” and including “retroactive registration” for foreign entities owning real-estate since January 1, 2014.
Due-diligence requirements were also tightened for transactions and business relationships with high-risk third countries that could “jeopardise the integrity of the EU’s internal market” due to “deficiencies” in their counterterrorism and anti-money laundering policies.
A high-risk categorisation will result in the adoption of particular EU or national countermeasures at the entity or Member State level. The risk assessment will be based on financial action task-force listings.
Central-register submissions will be verified and entities linked to sanctioned individuals will be flagged.
Registers can be accessed by relevant supervisory bodies, the public, press and “civil society” and real-estate registers, to aid criminal investigations.
FIUs will gain immediate access to various information sources, ostensibly enabling cross-border co-operation.
The FIU.net system has been upgraded for faster “data dissemination”.
“Fundamental rights” are emphasised in FIUs’ work and a framework has been established for suspending transactions for analysis purposes.
Before being put into effect, the new regulations still need to be formally adopted by the Member States and the European Parliament.
