In a significant move aimed at combating money laundering, the European Union (EU) reached an agreement on Thursday to implement tougher rules targeting cryptoassets and dealers in luxury goods such as cars and yachts. The agreement signals a unified approach to tackle financial crimes within the 27-country bloc and serves as a blow to oligarchs and criminals who seek refuge within its borders.
Representatives from EU member states and the European Parliament concluded negotiations in the early hours, finalizing a new framework for anti-money laundering measures. Eero Heinaluoma, a participating lawmaker, expressed the significance of the agreement, stating, “It is a good day for EU citizens and businesses, but a bad day for oligarchs and terrorists.”
The EU has long recognized the need for robust anti-money laundering regulations. However, the previous rules were implemented disparately across member states, creating vulnerabilities that facilitated cross-border criminal activities. The infamous case of Danske Bank’s admission in 2018, revealing suspicious payments totaling €200 billion flowing through an Estonian branch, underscored the urgency of enhancing cross-border cooperation.
The recent agreement establishes a single EU rulebook for combating money laundering, completing a comprehensive package that includes the establishment of a new EU anti-money laundering authority (AMLA), agreed upon last month. The AMLA, whose location is yet to be determined, will be empowered to intervene if a member state exhibits delays in addressing money laundering issues.
The scope of the new rules is expanded to cover various sectors, including cryptoassets, luxury goods traders, football clubs, agents, and entities involved in “golden” visa schemes offered by certain EU states in exchange for property investments. The overarching goal is to scrutinize the sources of funds for purchases and assess whether the purchaser is subject to EU sanctions.
Cryptoasset service providers are mandated to conduct checks on customers involved in transactions worth €1,000 or more and report any suspicious activities. Cross-border cryptoasset firms are required to perform additional checks. Similarly, traders of luxury goods, precious metals, jewellers, and goldsmiths are obligated to verify customers.
A notable inclusion is the imposition of an EU-wide maximum limit of €10,000 for cash payments. This measure aims to deter criminals from laundering money through large cash transactions. Firms within the scope of the new rules are required to identify and verify individuals conducting occasional cash transactions ranging from €3,000 to €10,000.
Lawmaker Paul Tang emphasized one of the key objectives of the agreement, stating, “One of our key objectives was to ensure that white-collar criminals will no longer be able to launder their money through the acquisition of expensive cars, yachts, and private planes.” Such high-value purchases are often considered the preferred assets of oligarchs.
Furthermore, the new rules mandate the registration of the ultimate or beneficial owner of all foreign entities owning real estate in the EU, retroactively applied from January 2014. The formal approval of EU states and the full parliament is required before these rules become law, signaling a comprehensive and coordinated effort to enhance the region’s defenses against money laundering activities.