MEPs have approved the establishment of a new EU anti-money laundering agency, which will be based in Frankfurt.
According to EuroNews, this decision comes as part of a broader legislative package aimed at tightening controls over large cash transactions, football club dealings, and cryptocurrency exchanges across the bloc.
The establishment of the agency is a response to a need for more robust oversight in the face of financial scandals that have marred the EU’s reputation. The agency will have approximately 400 staff members who will oversee anti-money laundering measures at 40 of the EU’s largest financial institutions. This initiative is part of a package that also bans cash transactions over €10,000 and extends regulations to include artwork, jewellery, luxury yachts, and notably, cryptocurrencies.
EU Financial Services Commissioner Mairead McGuinness highlighted the urgency of the reforms, stating, “Dirty money finances terrible crimes. There is an absolute imperative to improve significantly on the current situation.” Her sentiment was echoed across the political spectrum, emphasizing the widespread support for the measures.
Another critical aspect of the legislation is its application to football clubs and agents, known for their significant financial transactions. By bringing these entities under stricter regulation, the EU aims to close loopholes that have been exploited for money laundering.
On this topic, Ted Datta, Senior Director – Head of Financial Crime Compliance Practice, Europe, Africa & Americas at Moody’s, said: “The inclusion of the football industry in the EU’s latest money laundering directive is a significant step towards enhancing the transparency of professional sports. Given the top 20 clubs alone generated €10.5bn in the 2022/23 season, and the presence of kleptocratic wealth in the game, left unregulated the industry would present a significant avenue for money laundering.
“With football clubs, agents, and associations now required to implement robust anti-money laundering (AML) and counter-terrorism financing (CTF) measures, there is a need for these entities to rapidly assimilate the best practices from well-regulated sectors. A focus on building strong data-led, risk-based remediation and compliance will also help in building a resilient framework that withstands scrutiny and preserves the sport’s reputation.
“It remains to be seen what the impact will be over the five-year implementation period set by the EU. For European football to be fully rid of dirty money, a greater focus on beneficial ownership and ultimate beneficial ownership (UBOs) which assesses the influence of hidden stakeholders should be considered.”
The new regulations are part of a cohesive EU-wide approach that seeks to eliminate the discrepancies that have made cross-border business operations challenging and allowed criminals and terrorists to exploit system vulnerabilities. Additionally, the rules now consistently apply to high-risk sectors and introduce more stringent measures for cryptocurrency providers, addressing concerns about the potential use of digital assets in illicit activities.
As part of the legislative package, a separate directive was also passed to resolve issues related to journalists and activists accessing financial data, a concern heightened by a 2022 EU court judgment that restricted access to company ownership registers.
These comprehensive measures reflect the EU’s commitment to strengthening its financial systems and restoring its integrity on the global stage. As these new rules take effect, the EU hopes to shed its association with financial scandals and improve its standing in international financial security rankings.
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