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The EBF has provided feedback to the European Commission’s proposed AML Package (AML Regulation, AMLD6, AMLA Regulation, Recast FTR)
According to the EBF, a paradigm shift is needed. This consists in moving away from the existing legalistic and bureaucratic tick-the-box approach which generates massive flows of irrelevant data that Financial Intelligence Units cannot exploit in an efficient manner. Some of the steps proposed in the package are going in the right direction, notably by addressing the existing regulatory and supervisory fragmentation, as well as extending transparency requirements to crypto-assets and crypto-asset service providers.
While the standardisation of key customer identity information for KYC purposes and beneficial ownership information introduced with the proposed AML Regulation is a positive move, the approach is too prescriptive, and the discretion left to the Member States in adopting additional measures may lead to gold-plating, reintroducing fragmentation. Besides, the proposed AMLD6 maintains the status quo about Beneficial Owner (UBO) registers. In the EBF’s view, UBO registers need to be not only harmonised and interlinked, but also significantly strengthened.
The set-up of a new EU AML Authority (AMLA) is a crucial component of this package. It is hence of great importance that it brings true value to the effective fight against financial crime and does not simply introduce another layer of ex-post reporting.
The EBF maintains that it is key to develop an intelligence-led approach to effectively mitigate money laundering risks and detect financial crime. However, the package does not address some fundamental dimensions of information sharing which must leverage new technologies and involve all actors of the AML framework, including law enforcement and public-private partnerships.