The European Council agreed on its partial position on the proposal for establishing the anti-money laundering and countering the financing of terrorism (AML/CFT) Authority in European Union. The position is partial as the European Council has not yet agreed on the location at which the new Authority will have its seat. Additionally, negotiators from the Council presidency and the European Parliament have reached a provisional agreement on the proposal that updates the rules on information accompanying the transfers of funds by extending the scope of the rules to transfers of crypto-assets.
The introduction of this crypto-asset rule will ensure financial transparency on exchanges in crypto-assets and will provide the European Union with a solid and proportional framework that complies with the most demanding international standards on the exchange of crypto-assets. The aim of this recast is to introduce an obligation for crypto-asset service providers to collect and make accessible certain information about the originator and the beneficiary of the transfers of crypto-assets they operate. The new agreement will enable the European Union to deal with the money laundering and terrorist financing risks that are linked to the new technologies, while reconciling competitiveness, consumer and investor protection, and the protection of the financial integrity of the internal market. The new agreement requires that the full set of originator information travel with the crypto-asset transfer, regardless of the amount of crypto-assets being transacted. There will be specific requirements for crypto-asset transfers between crypto-asset service providers and un-hosted wallets.
Regarding data protection, the co-legislators agreed that the general data protection regulation (GDPR) remains applicable to transfers of funds and that no separate data protection rules will be set up. The improved traceability of transfers of crypto-assets will make it more difficult for persons and entities that are subject to restrictive measures to try to circumvent them. In addition, crypto-asset service providers will have to implement appropriate internal policies, procedures, and controls to mitigate the risks of evasion of national and Union restrictive measures. In due course, member states will have to ensure that all crypto-asset service providers qualify as obliged entities under the fourth Anti-Money Laundering Directive. Co-legislators also agreed on the urgency to ensure traceability of crypto-asset transfers and chose to align the timetable for application of this regulation with that of the markets in crypto assets (MiCA) regulation.
Keywords: Europe, EU, Banking, AML CFT, ML TF Risk, MiCA Regulation, Regtech, Securities, MiCA, Crypto-Assets, European Council, European Parliament
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