AML Regulatory Changes in 2024: Essential Insights

The evolution of Fintech in the financial sector, demands strong regulatory frameworks to protect financial transactions from risks that could lead to illegal activities. In Europe, particularly, financial sector regulations have tightened to ensure the integrity of the securities market. The Cyprus Securities and Exchange Commission (CySEC), has established itself as a prominent hub for investment firms, offering a secure and well-regulated environment.

Overview of Forthcoming AML Regulatory Amendments

The anticipated key changes in AML regulations include:

New AML/CFT Regulation: This regulation introduces directly applicable rules on customer due diligence and identifying beneficial ownership.
Revised Regulation 2015/847/EU: This update improves the traceability of crypto-asset transfers and enforces the "travel rule" within the EU.
The 6th AML Directive (AMLD6): Replacing AMLD4 and AMLD5, AMLD6 addresses new risks and improves transparency in financial operations.

The new watchdog: AMLA

The AML Authority (AMLA), is expected to go live in early 2025. AMLA will serve as both a regulator and supervisor.

The 6th Anti-Money Laundering Directive (AMLD6)

The 6th Anti-Money Laundering Directive (AMLD6) aims to provide a more standardized and stringent approach to tackling ML and TF across the EU. It seeks to harmonize definitions and offenses related to money laundering, ensuring a uniform legal framework across member states.

Key features of AMLD6 include increased accountability for regulated entities, enhanced inter-authority cooperation, and the introduction of administrative penalties for non-compliance. Penalties for non-compliance may include:

Fines of at least €10,000,000 or 10% of annual turnover for legal entities.
Fines of at least €5,000,000 for individuals.
Fines of at least twice the profit gained from the breach or at least €1,000,000.

Obliged entities must stay informed of the regulatory updates. At Tashev Law, we can help your business to be proactive in adapting to these new regulations.