Europe to tighten anti- money laundering regulation

European Union (EU) lawmakers have voted in favour of tougher anti- money laundering (AML) regulations, that would extend the obligations imposed on payment institutions to include virtual currencies and prepaid cards.

The vote moves forward last July’s proposal by the European Commission (EC), the EU’s executive arm, to lower the upper limit of non-reloadable prepaid cards to €150 (US$159) from €250 and virtual currency platforms such as bitcoin brought within the AML rules. Prepaid cards were used by the perpetrators of the November 2015 terrorist attacks in Paris.

Another agreed amendment would allow the public to view data about the owners of trusts and companies, extending the access given to tax authorities to include groups such as journalists and activists. The amendment, passed by an overwhelming majority in the economic committee of the European Parliament (EP), rejects the UK government’s traditional policy of protecting the privacy of inheritance trusts.

The bill was introduced following a series of revelations on wealthy individuals’ use of shell companies as a means of avoiding tax, many of which were revealed by the ‘Panama Papers’ leaks. It would require EU member states to establish centralised registers of information about bank and payment-account holders, which national authorities could access in case of suspicious activities.

Tax authorities would gain access to national AML information, including the true owners of companies and trusts to prevent tax evasion by hiding funds offshore.

“Tax evasion and avoidance cause countries inside and outside Europe to miss out on billions of euros every year,” said Sven Giegold, a representative for the EU’s Green Party on financial and economic issues. “Through a public register for companies and trusts, the EP wants to shed light on these structures in order to combat them.”

However, the bill may yet undergo further amendments in negotiations between the EP, representatives of EU governments and the EC.


Related reading