An effective anti-money laundering strategy is a crucial aspect for any organization within the financial sector. Money laundering can plague financial institutions and result in hefty fines or damaged reputations. The EU unveiled its largest AML package to date and is designed to help organizations limit the possibility of money laundering as well as limit its impact on the organization.
The EU’s package was originally unveiled in July of 2021and consists of four legislative proposals that target four key areas:Introducing a single AML rulebook, new AMLA supervisory authority, FIU coordination and support mechanism, as well as new requirements for crypto transfers. Last week we discussed the new AML rulebook being introduced by theEU and how organizations can best adapt to this coming rulebook. We have already discussed two of the previous key areas, introducing a single AML. rulebook, and a new AMLA supervisory authority. This week we will discuss the third key area, an FIU coordination and support mechanism.
FIU coordination and support mechanism.
The new FIU mechanism will act similarly to the AMLA in which this mechanism will offer financial intelligence units assistance with suspicious activity reports as well as offer stable hosting for FIU.net platforms.
Through the AMLA FIUs will coordinate with one another and share expertise to determine the best practices for threat assessments as well as strategies regarding ML and TF threats. To achieve the best practices and strategies the AMLA is expecting all FIUs to participate and will likely result in an increase of requests for customer data by FIUs.
Organizations can expect the AMLA to release standardized templates that will give clear guidelines for properly reporting suspicious activity. This will likely increase the speed and efficiency with which FIUs exchange information across borders. These changes are also designed to help organizations streamline their operations by providing clarification regardingFIU expectations.
The new directive will also force all member states of the EU to keep and maintain detailed information regarding the operations of their AML framework. This will include the number of reports given to the FIU as well as all identified offenses.
These changes will likely significantly increase the requirement for organizations to keep up-to-date and accurate information that they are reporting to FIUs.
Next week we will discuss the fourth and final key area of the EU’s new regulatory framework, requirements for crypto transfers.