Regulation (EU) 2024/1624 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing

What it is

to lay down rules on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (Single EU Rulebook). PROPOSED ACT: Regulation of the European Parliament and of the Council. ROLE OF THE EUROPEAN PARLIAMENT: the European Parliament decides in accordance with the ordinary legislative procedure and on an equal footing with the Council. BACKGROUND: money laundering and terrorist financing pose a serious threat to the integrity of the EU economy and financial system and the security of its citizens. Europol estimated that around 1% of the EU’s annual Gross Domestic Product is ‘detected as being involved in suspect financial activity’. The fight against money laundering and terrorist financing is vital for financial stability and security in Europe. The Committee on Economic and Monetary Affairs and the Committee on Civil Liberties, Justice and Home Affairs jointly adopted the report by Eero HEINÄLUOMA (S&D, FI) and Damien CARÊME (Greens/EFA, FR) on the proposal for a regulation of the European Parliament and of the Council on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing. The committee responsible recommended that the European Parliament's position adopted at first reading under the ordinary legislative procedure should amend the proposal as follows: Members stated that the proposed Regulation should lay down rules concerning: - measures to be applied by obliged entities to mitigate and manage the risks of non-implementation and evasion of targeted financial sanctions; - measures to prevent money laundering and terrorist financing in Member States which allow for citizenship or residence rights in exchange for any kind of investment, including capital transfers, purchase or renting of property, investment in government bonds, investment in corporate entities, donation or endowment of an activity contributing to the public good and contributions to the state budget; - measures to mitigate risks deriving from anonymous instruments and limit the misuse of bearer instruments. The amended text adds wealth managers to the list of entities subject to AML/CFT rules, as well as high-level football clubs, agents in the football sector and Member States’ football associations. Moreover, the report stressed that the risks of ML/FT involving works of art and other high value goods are well known. Therefore, it proposed to reduce the value of goods from which due diligence obligations apply from EUR 10 000 to EUR 5 000. Ban on citizenship by investment and minimum requirements regarding citizenship and residence by investment schemes Member States should not put in place schemes under national law which allow for citizenship rights in exchange for any kind of investment, including capital transfers, the purchase or renting of property, investment in government bonds, investment in corporate entities, donation or endowment of an activity contributing to the public good and contributions to the state budget, and without a genuine link with the Member States concerned. Register the beneficial owner of these entities in the Union The concept…

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