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EU: Council agrees position on strengthened AML rules

The Council of the European Union announced, on 7 December 2022, that it had agreed its position on a Proposal for a Regulation on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing ('the Proposed AML Regulation') and a Proposal for a Directive on the mechanisms to be put in place by the Member States for the prevention of the use of the financial system for the purposes of money laundering or terrorist financing and repealing Directive (EU) 2015/849 ('the Proposed AML Directive'). In particular, the Council outlined, among other things, that the new AML rules will be extended to the entire crypto sector, obliging all crypto-asset service providers to conduct due diligence on their customers.

Notably, the Council explained that, in its position, it aimed to:

  • make beneficial ownership rules more transparent and harmonised;
  • clarify related rules applicable to multi-layered ownership and control structures;
  • specify how to identify and verify the identity of beneficial owners across types of entities, including non-EU entities; and
  • clarify data protection and record retention provisions.

With regards to the next steps, the Council outlined that it will commence trilogue negotiations with the European Parliament in order to agree on a final version of the Proposed AML Regulation and the Proposed AML Directive.

You can read the press release here, the Proposed AML Regulation here, and the Proposed AML Directive here.