Proposal for a Regulation on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing

Summary:

Legislative initiative tabled by the European Commission on 20 July 2021, aimed at the provision of a common rulebook to prevent the use of the financial system for the purposes of money laundering (ML) and terrorist financing (TF). This is a text with EEA relevance.

Further information:

In July 2019, the European Commission unveiled a set of reports aimed at informing European and national authorities on how to better address money laundering and terrorist financing risks. As a follow-up, the Commission published in May 2020 an Action Plan setting out a common comprehensive framework on addressing such issues. This draft law delivers on some of the pillars structuring that framework.

The reports identified that whereas the requirements of Directive (EU) 2015/849 are far-reaching, their lack of direct applicability and granularity led to a fragmentation in their application along national lines and divergent interpretation. To address these issues and their consequences, al rules that apply to the private sector have been transferred to this draft law for an AML/CFT Regulation, whereas the organisation of the institutional AML/CFT system at national level is left to a Directive, in recognition of the need for flexibility for Member States in this area. Even so, the proposal does not simply transfer existing provisions, but also introduces changes of substance to bring about a great level of harmonisation and convergence in the application of AML/CFT rules across the European Union (EU).

This initiative was tabled by the European Commission on 20 July 2021, as part of a legislative package focusing on anti-money laundering (AML) and countering the financing of terrorism (CFT).

• Primary Source

Official

EUR-LEX: SWD(2021)190: Staff Working Document accompanying the Proposal - Impact Assessment https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=SWD:2021:190:FIN

EUR-LEX: SWD(2021)191: Staff Working Document accompanying the Proposal - Executive Summary of the Impact Assessment https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=SWD:2021:191:FIN

European Commission: Press Release, 20/07/2021: Beating financial crime: Commission overhauls anti-money laundering and countering the financing of terrorism rules https://ec.europa.eu/commission/presscorner/detail/en/ip_21_3690

European Commission: Questions and Answers: Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) (20 July 2021) https://ec.europa.eu/commission/presscorner/detail/en/qanda_21_3689

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