EU Plans To Update Anti-Money Laundering Laws

by Ulrika Lomas, for LawAndTax-News.com, Brussels

05 July 2004

Proposals to further strengthen the EU’s defences against money laundering and terrorist financing were last week presented by the European Commission.

The proposals are designed to update and improve the EU’s existing anti-money laundering Directive, and would broaden the definition of money laundering to apply to a wider range of serious crimes.

The proposed new Directive contains provisions to ensure the coherent application across EU member states of the Financial Action Task Forces's recommendations, and extends anti-money laundering obligations to those who provide services to companies, trusts, and life insurance intermediaries, as well as those dealing in goods or providing services for cash payments larger than EUR15,000.

The draft legislation also establishes more detailed know your customer (KYC) requirements.

Speaking on Thursday, Internal Market Commissioner, Frits Bolkestein explained that:

"The fight against money laundering and terrorist financing is a top political priority for the Commission. Since the first Directive of 1991, the Community has been at the forefront of international efforts to combat the laundering of the proceeds of crime. Massive flows of dirty money can damage the stability and reputation of the financial sector and threaten the single market, while terrorism shakes the very foundations of our society."

"The June 2003 revision of the Forty Recommendations of the Financial Action Task Force (FATF), has strengthened the world anti-money laundering standard and extended the rules to cover the financing of terrorism. The EU Directive must match that standard and ensure its co-ordinated application in the enlarged Union.”

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