Anti-Money Laundering: how the European Union presents their AMLA package
Is there an amount of cash that should be called reasonable? The European Union is currently debating this topic, as the policymakers have recently proposed to limit cash payments to as much as €10,000. This aims to get a tighter grip on (and eventually to get rid of it), the money-laundering.
The European Commission’s Mairead McGuinness, pointed out that the system that allows the cash ‘bagfuls’ to be used in purchases gives a comfortable ground for money-laundering. Instead, as we can’t be investigating the origin of every single penny and cent, other measures must be taken. This was said during the press conference which was held to unveil the AML (anti-money laundering) package.
The ceilings for cash payments are nothing new in Europe, as around two-thirds of member states of the European Union have already introduced them. They are ranging from as little as €500 in Greece to more than €10,000 in the Czech Republic.
The officials believe that this limit will allow flexibility for the everyday use of European families, while disabling the possibilities of letting unlawful cash into the market. It has been a pressing issue, as the European Commission is well aware of the fact that they cannot limit the citizens too much.
McGuinness, who comes from Ireland, spoke in the Commission’s Berlaymont room with Valdis Dombrovskis, who is one of the executive vice-presidents of the institution. Behind them, we (and the press present there) could see the ‘Stronger EU Rules to Fight Financial Crime’ motto, alongside #EUStopsDirtyMoney.
This new EU package has been announced 30 years after the original AML directive. The new plan has was adopted in May 2020 by the Commission. As McGuinness puts it, the application of the new rules has been suffering from a sufficient detail lack on the international (in this case – the European Union’s) level.
How has the AMLA been received?
A few months back, she promised that their actions will be focused on making the case international, as on the national level the debate tends to dissolve and diverge with big ease. From their Luxembourg’s headquarters, the ECA (European Court of Auditors) has published its report, which contained an 83-page-long analysis. They stated that the EU’s anti-money laundering efforts are far too fragmented, thus its implementation in the banking sector is highly unlikely. To quote the ECA report, the EU’s actions are ‘insufficient’.
What is planned besides the €10,000 limit?
The major attention will be drawn to the new body – AMLA (Anti-Money Laundering Authority), which is supposed to be tougher than any structure before them. They are supposed to be regulating the European Union’s approach while working on two important tasks. The first one is connected to terrorism and the second one to money laundering. They will supervise the already-existing FIUs (Financial Intelligence Units).
It is set to be established in 2023, their works and actions will begin in 2024, with the full staffing being reached in 2026 (around 250 people). The direct supervision of financial entities labelled as ‘high-risk’ is supposed to begin the same year. It may seem to be a little late, but the European Commission has directly stated, that before this happens, the harmonized rulebook for EU member states must be completed, applied, and checked.
So AMLA will start their work only when (and if) the stars align, and the rules are clear. Despite direct supervision over ‘obliged entities’, AMLA will also have the power to request Commission’s decisions about placing some entities under strict supervision. Will this solve the current problems? It’s hard to determine, especially as we are not yet sure what the rules will eventually be.
If you want to read a brilliant piece published by Disruption Banking, which speaks about this matter, and the implementation of new rules in general, use the following link and access Ian Hall’s great article. The author tried to put all the facts together and give some wider context to the discussed issue: https://disruptionbanking.com/2021/07/26/amla-matters-eu-presents-anti-money-laundering-package/.
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