Initial Thoughts on the June 2024 AML/CFT legislative package in its Official Journal

On 19th June 2024, the EU has published the AML/CFT legislative package in its Official Journal. It’s quite an ambitious program, and included in the package are the following:

• New money laundering directive (AMLD6): Directive - EU - 2024/1640 - EN - EUR-Lex (europa.eu)‍

• New money laundering regulation (AMLR): Regulation - EU - 2024/1624 - DA - EUR-Lex (europa.eu)

• Regulation establishing a joint EU anti-money laundering supervisory authority (AMLA-R): Regulation - EU - 2024/1620 - DA - EUR-Lex (europa.eu)

• Amendment of the money transfer regulation

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While July 2027 is the due date for compliance, based on what we can see within the package, it would not be too soon for organizations to start preparing for it now.  

This AML/CFT legislative package is applicable to the entire EU - while there will be an EU authority that will look at this further to provide guidelines, at Avallone, we can already see some main takeaways:

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1. This will broaden the scope for the types of companies that need to comply

And from this, we would strongly recommend that companies start thinking about not only their own categorization, but those of their counterparties - for example, customers, suppliers, investors, etc. With this, the team at Avallone would be able to provide advisory services to help you with the assessment and evaluation - especially if your organization is one of these types of newly added obliged entities / industries:

• Crowdfunding service providers and crowdfunding intermediaries

• Trader in luxury goods such as precious metals and stones, jewelers and goldsmiths.

• Trader in luxury items such as cars, airplanes, yachts and cultural goods (e.g. works of art)

• Football sector (e.g. professional football club, agent)

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2. More concrete guidance on already known areas

That is, there were some recommendations that had not been previously specifically written down, but it is now - for example: Obligated entities must continue to continuously monitor their business relationships. The obliged entities must update relevant documents, data or information about the individual customer. The frequency depends on the risk posed by the customer, but as something new, the period between two updates must not exceed one year for high-risk customers and five years for all other customers.

This means that you should expect more Know Your Customer (KYC) requests from your counterparties.

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More to come from our team in terms of analysis and thoughts, but this initial assessment should help you prepare and plan within your compliance and KYC teams.

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In the meantime, related to some of this announcement and the obliged entities, you may want to read some of our team’s previous articles:

• The Importance of KYC and Screening for Law Firms

‍• The Global Impact of the Danish Documentary "Den Sorte Svane" on the Compliance Industry

• Opinion on "Den Sorte Svane" (The Black Swan)

• Learnings after watching "Den Sorte Svane" (The Black Swan)