The EU is to further strengthen money laundering rules and counter-terrorism financing legislation.
New revisions to the Fourth Anti-Money Laundering Directive agreed by the European Parliament and the European Council are intended to increase transparency on who really owns companies and trusts by establishing beneficial ownership registers; prevent risks associated with the use of cryptocurrencies for terrorist financing and limiting the use of pre-paid cards; improve the safeguards for financial transactions to and from high-risk third countries; and enhance the access of Financial Intelligence Units to information, including centralised bank account registers.
Commenting on the stronger rules, Věra Jourová, Commissioner for Justice, Consumers and Gender Equality, said: “The Panama Papers and the recent terrorist attacks have shown that we urgently need better Anti-Money Laundering rules.
“Today’s agreement will bring more transparency to improve the prevention of money laundering and to cut off terrorist financing. Better cooperation to fight these crimes will make the difference. I will also make sure that the existing and upcoming rules are enforced properly, otherwise they are just empty words.”
The move to strengthen the legalisation came after increasing fears were raised that organised criminals and terrorist organisations such as Daesh are using cryptocurrencies such as Bitcoin, which offer a high degree of anonymity, to avoid taxes and fund their illegal activities.
Proposals to beef up the rules were first presented by the Commission in 2016 following a series of major terrorist attacks and the revelations contained in the Panama Papers.
The new measures are intended to help member states better counter terrorist financing and ensure increased transparency of financial transactions.
Earlier this month, police in the UK warned that criminals are using cryptocurrency ATMs to launder the proceeds of their legal activities.
Owners of convenience stores in which the machines are placed have reported witnessing young men, often selling strongly of cannabis, feeding large amounts of cash into them.
Speaking with the Press Association, Detective Superintendent Nick Stevens, of Scotland Yard’s Serious and Organised Crime Command, commented: “Cryptocurrencies are not illegal, but they are unregulated, decentralised currencies that can be quickly transferred across borders and then converted into the currency of the country where the funds are received.
“Organised criminal groups have been early adopters of cryptocurrencies to evade traditional money laundering checks and statutory regulations.”
The UK government is currently looking at ways of regulating cryptocurrencies such as Bitcoin as a result of concerns about them being used by criminals to launder money and avoid paying taxes.
While the UK has pledged to back new EU anti-money laundering rules, the British government intends to carry out an inquiry into the possible regulation of digital currencies.