Summary: 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 (AMLD6) (from 2027)
EU Anti-Money Laundering (AML/CFT)
WHAT IS THE AIM OF THE DIRECTIVE?
Directive (EU) 2024/1640 aims to strengthen national anti-money-laundering and anti-terrorism-financing policies by setting out rules on:
- requirements relating to certain service providers and to the granting of residence rights in exchange for investment;
- checks on the senior management and beneficial owners [1] of certain obliged entities [2];
- risk assessments at the European Union (EU) and national levels;
- the setting up of registers (central beneficial ownership registers, bank account registers and electronic data retrieval systems) and on a single access point to real estate information;
- the responsibilities and tasks of financial intelligence units (FIUs) and anti-money-laundering and countering the financing of terrorism (AML/CFT) supervisors;
- cooperation between authorities with competencies in the domain of preventing and combating money laundering and terrorism financing (ML/TF).
KEY POINTS
EU Member States:
- may decide to apply all or part of Regulation (EU) 2024/1624 to other activities they consider exposed to money-laundering and terrorist-financing risks, informing the European Commission, justifying the decision and assessing the impact of such application on the provision of services within the internal market;
- ensure:
- currency exchange or cheque cashing offices and trust or company service providers are licensed or registered,
- providers of gambling services are regulated,
- other obliged entities comply with minimum registration requirements to enable supervisors to identify them;
- must mitigate money-laundering risks, if they grant residency rights in exchange for an investment, by:
- putting in place a risk management process, overseen by a designated authority, to identify, classify and mitigate risks,
- applying measures, including checks on an applicant’s profile and source of wealth with verification against existing records and periodic reviews of medium and high-risk applicants,
- publishing a public annual report on the number of applications, applicants’ countries of origin, residence permits granted or rejected and any change in the financial risks identified,
- informing the Commission by of all the measures taken;
- require supervisors to check that senior management in obliged entities are of good repute, act with honesty and integrity and are equipped to do their job.
Risk assessments
The European Commission:
- assesses the risks of cross-border money laundering, of terrorist financing and of non-implementation and evasion of targeted financial sanctions affecting the internal market and relating to cross-border activities;
- must draw up a public report of its findings by , updating it every four years, or more frequently if needed.
Member States:
- carry out national risk assessments to identify, assess, understand and mitigate the risks of ML/TF and non-implementation and evasion of targeted financial sanctions;
- keep the assessments up to date and review them every four years;
- designate an authority to coordinate their response to the risks of money laundering, terrorist financing and the non-implementation and evasion of targeted financial sanctions;
- keep comprehensive statistics on the effectiveness of their AML/CFT structure.
