The European Commission has put forth a package of legislative proposals to strengthen the European Union’s anti-money laundering and countering terrorism financing (AML and CFT) rules, including standardizing rules regarding cryptocurrency.
The set of proposed rules would create a new EU authority, the Anti-Money Laundering Authority (AMLA), a Europe-wide agency that will coordinate national authorities to “ensure the private sector correctly and consistently applies EU rules.”
Currently, only certain categories of cryptocurrency asset service providers are subject to the existing AML rules. The newly proposed reforms would extend regulation to the entire cryptocurrency sector, requiring all service providers to conduct due diligence on customers and ensure full traceability of crypto transactions.
AMLA will also support financial intelligence units—EU countries’ national bodies that monitor and compile data on suspicious transactions—to improve their analytical capacity around the illicit flow of money and provide increased financial intelligence to law enforcement agencies.
According to the proposal, the authority will establish a blanket integrated system of AML and CFT supervision across the EU, “based on common supervisory methods and convergence of high supervisory standards.” It also aims to support cooperation among different financial intelligence units to coordinate the detection of illegal cross-border financial transactions.
Cash Transaction Limits
Along with the formation of the AMLA, the new proposals also include an EU-wide limit of €10,000 ($11,800) on large cash payments. About two-thirds of EU nations already have limits on cash transactions of varying amounts, but the proposal would extend those limits to the entire bloc and standardize the amount. The commission also announced that it will work in conjunction with the Financial Action Task Force, a global money laundering and terrorist financing watchdog, to combat dirty money around the world.
“The package is capable of creating the necessary uniform standards against money laundering in Europe, which will allow for fewer divergences between member states that can create loopholes and be exploited by criminals,” said Sven Giegold, a member of the European Parliament, in a statement. “With the new Anti-Money Laundering Authority we get effective supervision at the EU level.”
AMLA will replace the role of the EU’s European Banking Authority in coordinating enforcement of AML and CFT rules, which it had done since 2019. 
Danny Flynn is assistant editor at Compliance Chief 360°