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Kristina Frunze

11 July 2018

Cryptocurrency

New EU Anti-Money Laundering Directive Takes Effect

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New EU Anti-Money Laundering Directive is effective starting from 9th July. According to the officials, the directive is aiming to address the risk of terrorist financing through the anonymous use of cryptocurrencies and prepaid instruments. 

11 July, AtoZ Markets The fifth anti-money laundering directive of the European Union has been put into effect. According to some of the online reports, the directive has been met with a wave of critical comments. 

New EU Anti-Money Laundering Directive Takes Effect

The EU authorities have been talking about the improvement of the control measures for digital payments and cryptocurrencies for a long time now. This has resulted in a fifth version of the EU’s anti-money laundering directive. The directive has been finalized in April and it came into force on the 9th of July. 

According to the officials, the directive is aiming to address the risk of terrorist financing through the anonymous use of cryptocurrencies and prepaid instruments. It also looks into increasing the transparency of the company owners in a bid to prevent money laundering and advance the work of financial intelligence units.

Furthermore, the new EU AML directive is designed to improve the collaboration between AML supervisors and the central bank of Europe. It extends the AML and counterterrorism financing rules to cryptocurrencies and firms that do business in this market. This includes actors that sell, store, and transfer cryptocurrencies. 

EU AML Rules Critique

The fifth version of the AML directive also focuses on the transparency and sharing of information between financial and AML bodies. This is aimed to prevent cross-border money laundering, illegal transfers, and terrorism financing. 

Yet, some of the online reports state that the new AML rules can be already out of date. This is due to the fact that they do not fully address the issued that have been brought to the public attention by some of the banking cases in Malta, Estonia, and Latvia.

The EU Commission has appointed a number of banking watchdogs as a part of its plan to improve the coordination of AML supervision. Yet, the EU Central Bank’s Supervisory Board chair, Danièle Nouy, stated that EU rules do not provide regulators with authority to remove banking licenses. In addition, "financial intelligence units" do not cooperate, which allows criminals to hide illegal proceeds.

As a matter of fact, while this directive of the EU AML rules comes as the fifth version of the regulations, the majority of EU countries still did not comply with the fourth AML directive that came into force in 2015.

Think we missed something? Let us know in the comments section below. 

Cryptocurrency News EU AML

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