EU Tightens Measures Against Money Laundering and Terrorist Financing
The European Union continues to fight money laundering with the establishment of a new instrument. The Anti-Money Laundering Authority (AMLA) is a newly created European agency dedicated to combating money laundering and terrorist financing.
AMLA was officially established in June 2024 and is headquartered in Frankfurt am Main. The new EU agency aims to coordinate and enhance the efforts of national authorities in combating money laundering and terrorist financing, with the goal of curbing and ideally drying up illicit financial flows. This initiative seeks to mitigate risks to the economy caused by money laundering while also hampering the financing of criminal activities. AMLA is expected to commence operations by mid-2025.
Harmonizing Anti-Money Laundering Measures
The new European authority aims to harmonize essential legal frameworks across EU member states, enhancing the effectiveness of international efforts to combat money laundering. AMLA will be granted extensive powers, including direct supervision of 40 selected, high-risk financial institutions, with the ability to intervene when necessary. For other institutions not directly under its purview, as well as businesses outside the financial sector, AMLA will support national authorities, according to the business law firm MTR Legal Rechtsanwälte, which advises on economic criminal law and money laundering-related matters.
With these broad powers, AMLA is expected to intensify anti-money laundering efforts. The measures will affect not only financial institutions but also businesses in adjacent sectors, such as real estate and cryptocurrency service providers.
New EU Directive on Money Laundering
Additionally, the new EU regulations to combat money laundering and terrorist financing, adopted by the European Parliament in May 2024, will need to be observed.
These rules particularly target cash transactions, as cash remains a highly favored method for “cleaning” money derived from illegal activities. As part of the 6th Anti-Money Laundering Directive, a new EU-wide cash transaction limit of €10,000 will be introduced. Member states are free to impose lower limits. Furthermore, customers must be identified for cash payments exceeding €3,000.
Cryptocurrency Service Providers and Luxury Goods
Stricter regulations will also apply to cryptocurrency transactions. Cryptocurrency service providers will now fall within the scope of obligated entities, meaning they must adhere to enhanced due diligence requirements. This is especially relevant for cross-border correspondent banking relationships, aiming to make cryptocurrency asset transfers more traceable and limit money laundering opportunities. Consequently, cryptocurrency service providers may come under AMLA’s supervision.
Luxury goods dealers, such as those selling yachts, private jets, or high-end cars valued at €250,000 or more, will also be subject to stricter Know Your Customer (KYC) requirements. Additionally, the sale of such items will automatically trigger a report to the Financial Intelligence Units if the buyer is a company or trust based outside the EU. Similar controls will apply to transactions involving jewelry, gemstones, gold, and other precious metals when purchase amounts exceed €10,000.
Real Estate and Football
Stricter controls are also planned for the real estate sector. Non-EU companies or trusts that have owned property within the Union since 2014 must register these holdings in the Transparency Register.
Given the significant financial flows in professional football, player transfers, investments, and sponsorships may also come under scrutiny. However, these activities will largely be governed by national regulations within EU member states.
Like AMLA, the new Anti-Money Laundering Directive aims to unify and enhance the efficiency of anti-money laundering measures across the EU. It must be transposed into national law by July 10, 2027.
Obligated entities should prepare for these new regulations early, as violations could result in severe penalties.
MTR Legal Rechtsanwälte provides guidance on money laundering and other matters of economic criminal law.
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