Accountancy Europe: Navigating the EU Anti-Money Laundering Regulation

18 December 2024

Key issues for the accountancy profession. The EU’s new Anti-Money Laundering Regulation (AMLR) is a major milestone in the fight against money laundering (ML) and terrorist financing (TF).

Accountancy Europe’s factsheet (available in the downloads section) summarises the key provisions of the AMLR and highlights their implications for accountants, auditors, and tax advisors.

The AMLR will substantially impact accountants’, auditors’ and tax advisors’ – and all other so-called obliged entities – daily operations and compliance obligations in the areas of customer due diligence, beneficial ownership transparency, compliance with targeted financial sanctions, suspicious activity reporting, and record retention.

Below is a preview of the publication’s key insights[1]:

Impact and scope

The AMLR marks a shift from directives to direct application, meaning consistent enforcement across the EU. It affects a broad range of ‘obliged entities’ in financial and non-financial sectors including accountants, auditors, and tax advisors.

The legislation came into effect on 9 July 2024 and will apply from 10 July 2027. This gives professionals time to review and update their existing policies and practices to meet the new requirements. Given the AML rules’ volume and extent of detail, early preparation is crucial for practitioners to assess and plan for the changes ahead.

Key requirements

Impact on governance and responsibilities

The AMLR requires a strong internal control framework, including policies, procedures, controls, a risk assessment, and an independent audit function. The AMLR also clearly defines the compliance manager and officer roles, with requirements for their appointment, responsibilities, and protection from retaliation.

Strengthened Customer Due Diligence (CDD)

The AMLR largely builds on the existing CDD obligations set out in the 4^th AML Directive[2]. However, the devil is in the detail. The AMLR has lowered the transaction threshold that triggers CDD obligations from EUR 15,000 to EUR 10,000. Under the new rules, obliged entities carrying out occasional transactions that exceed EUR 10,000 must conduct CDD.AMLR also requires limited CDD measures for occasional cash transactions of at least EUR 3,000. These thresholds apply to both individual transactions and linked transactions.

The AMLR provides detailed guidance on standard, simplified, and enhanced due diligence measures, including:

• general CDD Measures: identifying and verifying customer and beneficial owner identities, understanding the business relationship, monitoring transactions, and identifying PEPs.
• simplified Due Diligence (SDD): applicable in low-risk situations, allowing for reduced scrutiny measures.
• enhanced Due Diligence (EDD): required for higher-risk scenarios, including dealings with PEPs, requiring additional information gathering and scrutiny.

New outsourcing rules and outsourcing prohibitions

... more at Accountancy Europe

© Accountancy Europe