Money Laundering: Council Approves Strengthened Rules

On April 20, 2015, the Council of the EU published a press release announcing that it has adopted its position at first reading on new rules aimed at preventing money laundering and terrorist financing.

The directive and regulation will strengthen EU rules against money laundering and ensure consistency with the approach followed at international level. The regulation deals more specifically with information accompanying transfers of funds.

The strengthened rules reflect the need for the EU to adapt its legislation to take account of the development of technology and other means at the disposal of criminals. The main elements are:

  1. Extension of the directive’s scope, introducing requirements for a greater number of traders. This is achieved by reducing from €15 000 to €10 000 the cash payment threshold for the inclusion of traders in goods, and also including providers of gambling services;
  2. Application of a risk-based approach, using evidence-based decision making, to better target risks;
  3. Tighter rules on customer due diligence. Obliged entities such as banks are required to take enhanced measures where the risks are greater, and can take simplified measures where risks are demonstrated to be smaller.

The decision will enable the European Parliament, with which agreement was reached on December 16,  2014, to adopt the package at second reading at a forthcoming plenary session. Member states will have two years to transpose the directive into national law. The regulation will be directly applicable.