18 December 2024 — Publication
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]:
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.
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.
The AMLR largely builds on the existing CDD obligations set out in the 4th 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:
The AMLR introduces new detailed rules on AML/CFT tasks outsourcing, distinguishing it clearly from reliance on other obliged entities. Outsourcing is allowed only under strict conditions, with certain critical tasks prohibited from being outsourced.
Due diligence requirements on the beneficial owner have been strengthened. The definition of beneficial ownership has been refined to provide a clearer framework for identifying individuals who ultimately own or control legal entities and arrangements. The threshold for determining ownership interest in a corporate entity is set at 25% or more of shares, voting rights, or other ownership interests.
Obliged entities are also required to verify whether the customer or beneficial owner(s) are subject to targeted financial sanctions (TFS).
The AMLR expands the definition of PEPs to encompass “heads of regional and local authorities”, as well as “groupings of municipalities and metropolitan regions”. It also specifies that, for the functions of heads of state, heads of government, ministers, deputy or assistant ministers, and equivalent roles at the Union level or in third countries, siblings are also considered ‘family members’.
The Regulation imposes an EU-wide maximum limit of EUR 10,000 for cash payments, whether in single or linked transactions. Member States may set lower limits.
Accountancy Europe’s factsheet serves as a starting point. The AMLR is a complex regulation, and the newly established AML Authority (AMLA) will release further guidelines and standards in the coming years to supplement the AMLR. Staying informed about these developments is essential to ensure compliance.
[1] This publication should not be used for legal compliance purposes. Professionals should revert to the original legal text to ensure compliance.
[2] See also “The 4th EU Anti-Money Laundering Directive – Relevant legislative changes for European professional accountants and auditors”, Information Paper, Federation of European Accountants, 2015.
