Anti-Money Laundering
AML directives and regulations affecting due diligence and customer verification in business information services
Overview
Anti-Money Laundering (AML) regulations prevent and combat money laundering activities. The EU's framework was significantly transformed on 17 January 2024, when the Council and Parliament reached a political agreement on the single AML/CFT Rulebook (AMLR) and the 6th AML Directive (AMLD6). The 5th AMLD had already extended the scope to virtual currency exchanges, custodian wallet providers, and entities in art trade and high-value goods. The new rules introduce an EU-wide cash payment limit of €10,000, harmonised beneficial ownership rules with a 25% ownership threshold, and enhanced due diligence for high-risk third countries and high net-worth individuals.
Key Points
- 1The 5th AMLD extended AML scope to virtual currency exchanges, custodian wallet providers, and high-value goods traders.
- 217 January 2024: Political agreement on the single AML Rulebook (AMLR) and 6th AML Directive (AMLD6).
- 3EU-wide cash payment limit of €10,000; identification required for occasional cash transactions between €3,000 and €10,000.
- 4Harmonised rules for beneficial ownership with a 25% ownership threshold and improved handling of complex ownership structures.
- 5Enhanced due diligence for cross-border correspondent relationships for crypto-asset service providers, high net-worth individuals, and high-risk third countries.
- 6Centralised beneficial ownership registers in each member state improve transparency on the ultimate owners of entities.
FEBIS Position
FEBIS members are instrumental in providing updated, accurate and comprehensive information on businesses, used not only for creditworthiness assessment but also by obliged entities complying with AML directives, anti-bribery laws, and due diligence processes before entering into or during a business relationship. FEBIS members facilitate B2B trade relations and transactions with a focus on credit and risk. As trusted third-party information providers, members have a legitimate interest to access beneficial ownership information, guaranteeing continuity of service for obliged entities and FIUs and preventing prejudicial disruption.
Implications for Members
- •FEBIS members facilitate B2B trade relations and are essential partners for obliged entities conducting due diligence.
- •Members act as trusted third-party providers for entities implementing due diligence processes, with a legitimate interest to access UBO data.
- •Enhanced beneficial ownership verification services represent significant growth opportunities under the 2024 AML Package.
- •PEP screening and ongoing monitoring services will see increased demand under AMLD6.
- •Members must align products with harmonised EU-wide due diligence requirements introduced by the AMLR.
- •Cross-border service delivery benefits from regulatory harmonisation through the single rulebook.
2024 AML Package Components
AML Regulation (AMLR)
Directly applicable single rulebook replacing directive provisions, harmonizing due diligence requirements across the EU.
6th AML Directive (AMLD6)
Covers national aspects including FIU powers, beneficial ownership register access, and supervisory arrangements.
AML Authority (AMLA)
New EU-level authority with direct supervision of highest-risk entities and coordination of national supervisors.
Transfer of Funds Recast
Updated requirements for crypto-asset transfers and enhanced traceability of fund movements.
Key Dates
19 June 2024
AML Package published in the Official Journal
1 July 2025
AMLA begins operations
10 July 2027
Main provisions of AML Regulation (EU) 2024/1624 and AMLD6 apply
January 2028
AMLA begins direct supervision of highest-risk obliged entities