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Cash Payment Limits and New Obligations for Organizations
One of the key innovations is the establishment of a maximum cash payment limit across the EU of 10,000 euros (approximately 252,000 Czech koruna). Additionally, the scope of organizations required to monitor client transactions and report suspicious activities has been expanded.
This category now includes professional football clubs, sports agents, and other entities whose activities pose high risks of money laundering. Member states may exclude organizations from this list if their activities are deemed to pose no serious threat. “As the sector and its risks are subject to significant changes, member states will have the ability to exclude them (organizations) from the list if they (activities) represent a low risk,” the new rules state.
Ludek Niedermayer, a Czech MEP, commented, “Money laundering is a dangerous crime, and it is always the culmination of other, typically very serious crimes from which the dirty money originates. Making money laundering impossible reduces the attractiveness of these crimes.”
He also emphasized the importance of limiting opportunities to hide the real beneficial owners, a practice widely employed by Russian oligarchs, among others. “The Russian invasion of Ukraine has further highlighted this issue and demonstrated existing vulnerabilities in disclosing the assets of sanctioned individuals,” he added.
EU Anti-Money Laundering Authority (AMLA)
The most significant element of the reform is the creation of a new supervisory body—the EU Anti-Money Laundering Authority (AMLA), which will be based in Frankfurt am Main. The legislative package approved by the European Parliament includes one directive (approved by 513 votes to 25 against, with 33 abstentions) and two regulations.
One of the regulations, which outlines the procedure for establishing AMLA, was supported by 482 MEPs, with 47 voting against and 38 abstaining.
The Role of AMLA in Coordinating Anti-Money Laundering Efforts
AMLA’s primary task will be to monitor, support, and coordinate the application of EU anti-money laundering rules across all member states. This will help to minimize the risk of inaction by individual states, which could turn them into gateways for illegal financial flows into the European Union.
Ludek Niedermayer, who served as the rapporteur for one of the legislative proposals, had suggested locating the AMLA headquarters in a small EU member country. However, he noted, “Unfortunately, the MEPs and the Council of the EU had a different opinion.”
Ultimately, the decision was made to place the new agency in Frankfurt am Main. Besides the German financial hub, Paris, Rome, Brussels, Dublin, Riga, Vilnius, and Vienna were also contenders for hosting AMLA.
Response to Scandals in the Banking Sector
The need to strengthen EU anti-money laundering legislation was driven by a series of scandals involving suspicious transactions that have affected banks in several countries, including Denmark, Estonia, Luxembourg, Spain, and the Netherlands in recent years. The reform package presented by the European Commission in mid-2021 was a response to these challenges and aimed at strengthening the system for combating money laundering and terrorism financing across the entire European Union.
