The new AML Regulation enters into force

Without claiming to be exhaustive, the main new features of the AMLR can be summarised as follows:

• Direct applicability. One of the main challenges with the current AML Directive (AMLD4) is the lack of direct applicability, which results in a fragmented approach across the Member States. The new AMLR will be directly applicable and will hence ensure an increased harmonisation of the AML/CFT framework throughout the European Union. The AMLR incorporates and modernises the requirements set out in AMLD4 (as implemented into national laws) and will therefore become the cornerstone of the new regime.
• New obliged entities. The AMLR extends the AML/CFT rules to new obliged entities, such as traders in precious metals and stones or other high-value and luxury goods (including jewellery, clocks, and watches of a value exceeding EUR 10,000), crypto-asset service providers, football clubs and agents, and all crowdfunding platforms and intermediaries. Some of these actors already fall within the scope of national AML legislation (e.g., football clubs and agents in Belgium and traders in some luxury goods in the Netherlands).
• Enhanced customer due diligence (CDD) requirements. The AMLR leverages on and enhances the existing CDD requirements set out in the AMLD4. Changes include, among others, the lowering of the EU-wide threshold for the application of CDD for occasional transactions from EUR 15,000 to 10,000 (this lower threshold is already applicable in Belgium), limited CDD measures for occasional transactions in cash amounting to a value of at least EUR 3,000, and the obligation for crypto-asset service providers to apply limited CDD measures even when carrying out an occasional transaction with a value below EUR 1,000.
• Limit on cash payments. The AMLR imposes a Union-wide limit of EUR 10,000 for cash payments to mitigate the risks associated with the use of cash. This limit applies whether the transaction is carried out in a single operation or in several operations which appear to be linked. Member States may adopt lower limits. Limits already existing at national level which are below the EUR 10,000 threshold (such as the EUR 3,000 limit in Belgium) must continue to apply.
• Beneficial ownership. The AMLR harmonises and clarifies the rules on beneficial ownership. The threshold of 25% or more of the shares or voting rights in the legal entity for having an ownership interest is maintained. The AMLR also provides for the possibility for the European Commission to set, after an assessment period ending on 10 July 2029, a lower threshold at a maximum of 15% for certain categories of corporate entities that are exposed to higher money laundering and terrorist financing risks.
• Reporting of suspicious transactions. The AMLR states that obliged entities must report all suspicious transactions to the (local) Financial Intelligence Unit (FIU). In the Netherlands, currently all unusual transactions must be reported to the FIU. Therefore, the reporting threshold will be raised.

Other new provisions of the AMLR relate, among others, to the identification of high-risk third countries, cross-border correspondent relationships, the definition of politically exposed persons, and the internal organisation (internal policies, procedures, and control) to be implemented by obliged entities.

The AMLR will apply as of 10 July 2027, with an exception for professional football clubs and football agents to which it will apply as of 10 July 2029.

The local AML legislations will need to be amended (or repealed) since the AML/CFT rules will be incorporated in the AMLR and be directly applicable in all Member States.

Obliged entities should actively prepare for the entry into application of the AMLR as of 10 July 2027 and make sure their AML/CFT framework is fully compliant with the new rules.

Our Benelux experts would be pleased to assist you with this exercise. Feel free to contact us should you have any questions.

Besides the AMLR, the AML package also includes:

• AMLD6: Directive (EU) 2024/1640 on the mechanisms to be put in place by Member States for the prevention of the use of the financial system for the purposes of money laundering or terrorist financing. This new Directive lays down rules concerning, among others, the setting-up and access to beneficial ownership registers, the responsibilities and tasks of the national FIUs, and the cooperation between competent authorities. AMLD6 must be implemented by Member States by 10 July 2027 (with some exceptions for certain provisions).
• AMLA Regulation: Regulation (EU) 2024/1620 establishing the Authority for Anti-Money Laundering and Countering the Financing of Terrorism. This new supranational AML authority will be based in Frankfurt and will have supervisory powers over high-risk obliged entities in the financial sector. It will also have a supporting role for the non-financial sector, and coordinate and support FIUs. The AMLA Regulation entered into force on 26 June 2024 and will apply as from on 1 July 2025 (with some exceptions for certain provisions).

The texts of the AMLR, the AMLD6 and the AMLA Regulation were published in the Official Journal of the European Union on 19 June 2024.