In May 2024, the European Union adopted a landmark AML package that marks the beginning of a unified, harmonized framework for combating money laundering and terrorist financing (AML/CFT). The new AML Regulation (AMLR) will apply directly in all Member States from July 2027, significantly impacting the operations of obliged entities across the EU.
What does the AML package include?
- AMLA Regulation (EU) 2024/1620 – establishing the new European AML Authority
- AMLR Regulation (EU) 2024/1624 – introducing harmonized AML/CFT rules across the EU
- 6th AML Directive (AMLD6) – on national mechanisms and registries
- ToFR Regulation (EU) 2023/1113 – transparency in transactions, including crypto assets
What changes in practice?
Establishment of AMLA – the new European AML Authority
AMLA will be the central AML supervisory body in the EU, headquartered in Frankfurt. It will directly supervise high-risk institutions, coordinate national FIUs, and develop standards and technology tools for analysis and information sharing.
AMLR – A Single AML Rulebook for All Obliged Entities
1. Stricter Customer Due Diligence and Monitoring
What changes:
- Mandatory identification for all clients with transactions above EUR 1,000
- SARs must be submitted within 5 working days upon FIU request
- EDD becomes mandatory for PEPs, crypto-related activities, offshore structures, and precious metal dealers
Example:
A fintech company offering virtual IBANs can no longer rely on “light KYC” for EEA customers. If a client transacts in cash or uses anonymous instruments, EDD and enhanced monitoring must be applied, even if the client is from a low-risk country.
2. Cash Payment Limit
What is introduced:
- An absolute EU-wide limit of EUR 10,000 for cash payments
- Identification is required for any cash payment of EUR 3,000 or more
Example:
A car dealership may not accept EUR 11,500 in cash for the purchase of a used vehicle. Even if the sale is for EUR 9,000, the customer must be identified with valid ID and go through a CDD process.
3. Broader Scope of Obliged Entities
Who is newly covered under AMLR:
- Crypto-asset service providers (VASPs)
- Crowdfunding platforms
- Professional football clubs and agents
- High-value goods dealers (jewelry, luxury cars, art)
Example:
A football agent arranging a €2 million player transfer will fall under AML control – they must identify all parties, verify the source of funds, and check for PEPs, sanctions, and suspicious indicators.
control is exercised via affiliates or contractual arrangements.
Expanded Registers and Central EU Access
What the 6th AMLD requires:
- Creation of national real estate registers
- Regular verification of UBO registers by national authorities
- Interconnection of all national registers through a central EU access point
Example:
A bank servicing a company with UBOs in another Member State will gain direct access to UBO data in neighboring countries – without lengthy requests or manual document exchange.
Transparency in Funds and Crypto Transfers (ToFR)
What is covered:
- The FATF Travel Rule – sender and receiver information must travel with the transaction
- Applies to crypto transactions via wallets and exchanges
- Systems must comply with ToFR by 30 December 2024
Example:
A crypto exchange transferring funds from a client to another VASP within the EEA must collect and transmit sender and recipient information – including full name, address, and ID number. Anonymous or incompatible transactions must be blocked.
What should companies do?
Practical steps for 2025–2026:
- Gap analysis – assess current policies against AMLR and ToFR
- Update internal policies and procedures – in line with the Regulation
- Risk assessment – implement a new model and methodology
- Staff training – mandatory for all employees, with training logs
- Audit systems and controls – for transactions, sanctions, and reporting
- Plan team structure and resources – MLRO, budget, tools
Need guidance?
Compliance Navi supports clients across Bulgaria and the EU with:
- Customized transition plans to AMLR compliance
- Preparation of internal AML/CFT policies and procedures
- Practical AML training for fintechs, VASPs, and financial institutions
Contact us at:
📧 office@compliance-navi.com
🌐 www.compliance-navi.com
