European Council agrees strengthened AML rules

The European Council has agreed its position on both an AML regulation and a new directive (AMLD6). These regulations aim to improve risk mitigation, detect criminal activity and ensure the EU’s financial system is resilient.

The new rules will extend regulation to the crypto sector, meaning crypto-asset service providers (CASPs) will need to conduct due diligence on their customers. CASPs must apply CDD measures when carrying out transactions amounting to €1,000 or more. The rules also include measures to mitigate risks relating to self-hosted wallets.

The Council’s decisions are not just affecting the crypto sphere – there will also be further regulation for third-party financing intermediaries, jewellers, horologists and goldsmiths. There will also be an EU-wide maximum limit of €10,000 for cash payments in an attempt to curb money laundering, but Member states can impose a lower maximum limit if they wish.

The Council has also decided to harmonise beneficial ownership rules and to make them more transparent. Journalists and civil society organisations connected with AML measures and combating terrorist financing will now be included in the persons who have access to beneficial ownership registers. Other rules including on control structures and multi-layered ownership have also been clarified.

The UK Treasury is also exploring plans to regulate the crypto industry and the Treasury Committee is currently mid-way through an inquiry into cryptoassets’ influence within the UK.

Nicola Radford