16 July 2021, 11:46
16 July 2021, 11:46
Also known as Anti money laundering, this refers to processes, actions, laws and compliance regulations that are designed to make it harder for criminals to profit from crime.
Current estimates are that roughly only 1% of all laundered money is detected. This is a Global problem and allows people to profit from organised crime, human trafficking and weapons smuggling.
If the legislation goes forward the new European AML authority will have a regulatory role. The AMLA would set up operations in 2024 and gain the ability to supervise some cross-border financial companies and impose fines on firms that breach money-laundering rules in 2026.
The authority will be the direct supervisor of certain financial sector entities which operate cross border and in the highest risk category.
The new Anti-money Laundering agency has been created due to the recent compliance breaches in AML and CTF in the EU. This is in direct relation in the wake of several bank scandals before the pandemic. The proposal said EU states will have to harmonise anti-money laundering laws for the project to work.
EU AML rules will be made directly binding on member states to stop criminals exploiting differences between national regulators, the documents said.
The proposals includes a single rulebook that the new watchdog would enforce (AMLA), will govern over a uniform rules surrounding.
There’s also an initiative to improve the coordination among financial intelligence units, the national hubs that analyse reports by banks and other companies on countering suspicious activities.
Since 2020, the EU has seen numerous breaches in the compliance surrounding AML and Financial Crime. And as a response the FATF has been forced to implement stronger governance over these issues.
However we have seen recent scandals in :
The proposal will also see the European Banking Authority of all its anti-money laundering duties and hand them to a new EU anti-money laundering watchdog.
The new EU AMLA will be dedicated to work independently of member states’ national authorities, giving it greater power to identify and act upon significant money laundering threats.
It will also have the ability to fine businesses in breach of regulations up to ten per cent of turnover, and it will be looking at risks from non-EU countries such as the UK.
However, Brexit results in the fact that the UK’s anti-money laundering laws are no longer governed by the European Union (EU), but that does not mean that the UK will not have to comply with the new regulations.
It is more than likely the UK will adapt and follow the AMLA governance
The Financial Action Task Force or the FATF is an inter-governmental decision making body. It was created in 1989 during the G7 Summit in Paris in response to the global concern over money laundering. Its current president is Marcus Pleyer as of the 1st of July 2020.
The policy body works towards bringing about a global legislative and regulatory revolution to money laundering. Additionally, since the occurrence of rising international terrorism such as 9/11 terror attacks in USA, the FATF has expanded to include such actions of terror finance under its governance.
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