The new money laundering package - what you need to know

The long-awaited new EU laundering package has been adopted and will enter into force on July 1, 2027.

The current anti-money laundering legislation already imposes a wide range of requirements on lawyers, real estate agents, and financial institutions, among others, to prevent money laundering and terrorist financing, but this new anti-money laundering package will introduce further tightening and more uniform rules, and more industries will be covered by the legislation. In addition, a new supervisory authority will be established and more extensive powers will be granted to financial intelligence units to combat money laundering and terrorist financing.

Although the anti-money laundering package will not come into force until 2027, it is important to consider now whether and to what extent the rules will affect your business.

Despite the fact that money laundering legislation already imposes strict requirements on a number of industries regarding their efforts to prevent money laundering and terrorist financing, it is now well known, both at national level and across the EU, that money laundering and terrorist financing occur on a large scale – and that this often happens through the abuse of financial systems and the actors involved in financial transactions, including, for example, lawyers, real estate agents, and banks.financing are occurring on a large scale – and that this often happens through the abuse of financial systems and the actors involved in financial transactions, including, for example, lawyers, real estate agents, accountants, and financial institutions. Money laundering legislation and the new tightening measures adopted in the new EU money laundering package are therefore an important tool for preventing and combating money laundering and terrorist financing.

The new EU anti-money laundering package consists of four parts:

1. A new Anti-Money Laundering Regulation (AMLR)
2. A new Anti-Money Laundering Directive (AMLD6)
3. A regulation establishing a single EU Anti-Money Laundering Authority (AMLA-R)
4. An amendment to the Money Transfer Regulation

As something new, the anti-money laundering package contains a regulation, and not just directives, as is the case today. This means that the rules in the anti-money laundering regulation will apply directly to the obligated companies and thus do not need to be implemented in EU countries through national legislation.

This will ensure a common set of rules and a unified legal framework for combating money laundering and terrorist financing across all EU countries.

The biggest challenge with the current regulation is that the rules are not directly applicable and have therefore led to different national approaches and different implementation of the rules.

What are the current requirements for preventing money laundering and terrorist financing?

Money laundering legislation already requires a number of different industries to prevent and combat money laundering and terrorist financing, including lawyers, accountants, real estate agents, and various financial institutions. The Money Laundering Act thus already requires the industries covered to have (written) procedures for risk management and customer due diligence in connection with the activities covered by the Money Laundering Act.

The Money Laundering Act already imposes a number of obligations on the industries covered, including, for example:

• Preparation of a written risk assessment for the company's activities
• Preparation of anti-money laundering policy and written procedures for handling customer due diligence procedures, etc.
• Implementation of customer identification procedures that ensure the identification and authentication of customers, including beneficial owners
• Preparation of risk assessments in connection with certain customer relationships
• Monitoring of customer relationships
• Investigation and reporting of suspected money laundering or terrorist financing
• Notification to the Money Laundering Secretariat in cases of suspected money laundering or terrorist financing
• Preparation of documentation and storage of information such as documents from the customer identification procedure, including identification documents, etc.
• Implementation of whistleblower scheme companies with more than 5 employees

Extension of money laundering rules with the new EU anti-money laundering package

The anti-money laundering package includes several new measures and tightening of rules in areas where Member States have so far had varying approaches.

The most significant changes are as follows:

• more industries are covered by the rules,
• there will be new requirements for the customer identification procedures of obligated companies,
• there will be new requirements for the internal processes and compliance setup of the obligated companies, and
• A supranational supervisory authority, AMLA (Anti-Money Laundering Authority), will be established.

If you are unsure about which money laundering rules your company is subject to, please contact us for a no-obligation chat.

New obligated companies

Today, it is primarily financial institutions, auditors, lawyers, and real estate agents that are covered by the rules of the Money Laundering Act.

The range of business types that are required to comply with anti-money laundering rules is being expanded with the new anti-money laundering package, so that the following new business types will also be covered by the anti-money laundering rules:

• Traders in precious metals and precious stones
• Traders in goods of high value and transportability (e.g., motor vehicles, watercraft, and aircraft)
• Soccer agents and professional soccer clubs
• Crowdfunding services and intermediaries
• The crypto sector
• Operators assisting third-country nationals in obtaining residence rights through investment

New requirements for customer identification procedures

It is a fundamental principle of money laundering regulations and efforts to prevent money laundering that obligated entities must know their customers, as this makes it easier to identify any attempts at money laundering.

This means, first and foremost, that companies must generally know who their customers and beneficial owners are, what business they are in, and what the purpose of transactions is. Depending on the risk associated with the customer, it may also be necessary to obtain information about the origin of the customer's funds.

The customer due diligence procedure must therefore be adapted to the risk associated with the customer in question.

The new EU anti-money laundering package imposes new requirements on these customer due diligence procedures in several areas, including the identification of customers and owners, updating customer information, and ongoing monitoring thereof.

The new requirements primarily relate to the following:

• Enhanced knowledge of customers from high-risk third countries designated by the Commission
• Obtaining additional identity information about the customer and beneficial owners, including place of birth, residence, nationality, and refugee status (does not apply to low-risk customers)
• Lowering of the threshold for when customer due diligence procedures must be carried out for occasional transactions. The threshold is lowered from EUR 15,000 to EUR 10,000.
• The definition of a close relative of a politically exposed person will also include siblings.

All obligated companies should therefore review and, if necessary, update their internal customer due diligence procedures to ensure that they comply with the requirements of the upcoming EU Anti-Money Laundering Package.

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New requirements for internal processes and compliance setup

In addition to stricter requirements for customer due diligence procedures, the EU Anti-Money Laundering Package also introduces new requirements for the compliance setup at obligated companies. This includes, among other things:

• That obligated companies must establish an independent audit function (e.g., an external auditor or lawyer) to audit internal policies, procedures, and controls.
• New requirements for company employees' knowledge of money laundering legislation and the company's risk assessment, internal policies, procedures, and controls
• New requirements that the company must appoint employees who are responsible for ensuring the company's compliance with the Money Laundering Act. Furthermore, these employees must have the necessary skills, knowledge, and expertise to perform this function, as well as a good reputation, honesty, and integrity.

The new EU anti-money laundering authority, AMLA

Finally, the new EU anti-money laundering package introduces a significant structural change in the form of the creation of the joint EU anti-money laundering supervisory authority, AMLA (Anti-Money Laundering Authority).

AMLA is responsible for ensuring uniform and consistent application of anti-money laundering rules in the EU, and one of its key tasks will be to issue guidelines in the area of anti-money laundering. AMLA will also be responsible for coordinating and supervising national anti-money laundering authorities and companies in the EU where the risk of money laundering is greatest.

Today, there are a number of supervisory authorities in the area of money laundering that monitor compliance with the rules within the various industries covered, including the Danish Financial Supervisory Authority, the Danish Business Authority, the Danish Gambling Authority, and the Danish Bar and Law Society. These supervisory authorities will continue to supervise compliance with money laundering rules by Danish companies subject to these rules.

CLEMENS helps

It has been announced that the European Commission and AMLA will adopt delegated acts and guidelines for the anti-money laundering package over the coming years. At CLEMENS, we are closely monitoring developments in anti-money laundering regulations and will provide regular updates with relevant news about developments in anti-money laundering regulations.

If you have any questions about this article, the new anti-money laundering package, the Anti-Money Laundering Act, or how the rules will affect your business, or if your company needs help with its anti-money laundering compliance setup, you are always welcome to reach out to our compliance team.