Finance

Anti-Money Laundering Authority – the new European Union’s package

The vivid question has been tried to be resolved lately among the European Union legislators. This time it regarded the possibilities of limiting cash purchases with a maximum cap. All this to ensure that money-laundering options become unavailable. And stay calm, the amounts that are currently being discussed orbit around €10,000 per single transaction. This way, the normal every-day life of European families will not be interrupted (at least if you’re buying gifts for each other that are worth less than €10,000).

The officials are not blindfolded, and they are fully aware of the fact that the system allowing literal bagful of money being paid hand-to-hand does not facilitate tracing back the origin of the cash. Mairead McGuinness, who spoke during the European Commission’s press conference in Berlaymont press room alongside Vladis Dombrovskis, believes that the newly introduced AML package will help solve these issues without making ordinary people’s lives harder.

The proposed solution of limiting the cash payments is nothing new in the European Union, as almost two-third of the member states have already introduced those on their own. The amounts vary, as in Greece the cap is €500, and in the Czech Republic (apparently, they are bigspenders) it’s €10,000.

According to McGuinness, the limit of €10,000 will allow the proper flexibility for citizens, while giving the authorities the chance to cut (in a way) the misuse options for criminals. The press conference was held on 20 July 2021, and behind European Commission’s envoys we could see the ‘Stronger EU Rules to Fight Financial Crime’ slogan alongside the hashtag StopDirtyMoneyEU.

The new resolutions are coming 30 years after the initial anti-money laundering plans and directives. In May 2020, the Commission was pressed to find solutions to the matter, that in many countries has been an increasing problem. The dirty money has continuously flown in the veins of the European Union, and obviously the EU authorities are not keen on that. The legislators have also become aware of the fact that on national level the details diverge quickly, so what is needed is a ‘strong hand’ operating internationally. This will possibly exclude any weak links in the EU and make the whole ecosystem healthier.

The Luxembourg-based ECA (European Court of Auditors) has summed up the European Union’s efforts in their 83-page-long report, calling them insufficient and fragmented. But we are still talking about the plans, and the implementation of these is still a matter of the future.

What are other ideas for the package?

Besides the cash limit, full attention has been put into forming a new body that will (if everything goes as planned), be tailor-made to fight cash misuse. The forming of AMLA (Anti-Money Laundering Authority) shall be the beginning of a new era. It is supposed to be a totemic and tough organ coordinated by the EU and taking care of their AML resolutions.

Their two major tasks will focus on fighting the financing of terrorist activities, and the supervision (support) of national FIUs (Financial Intelligence Units), that already exist. The authority will not be established until 2023, and the start of its activities is planned for 2024. The time is needed to establish a fully functioning structure, and that is why the full staffing (of around 250 employees) will be reached in 2026. The direct supervision over some ‘high-risk’ entities will begin the same year. Why will it be ready to work in five years’ time? Because the European Commission wants all the actions to be fully coordinated. This means that the AMLA will kick off only when the harmonized rulebook is presented by the officials.

That is why the full range of AMLA’s responsibilities and possibilities is yet to be discovered. What we currently know, is that they will supervise the entities marked as risky and will work tightly with the Commission.

Should you want to find out more about the AML processes that are planned for the future of the EU, use the following link: https://disruptionbanking.com/2021/07/26/amla-matters-eu-presents-anti-money-laundering-package/.

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