AMLA Drops Rules That Could Have Extended AML Duties to Unregulated Firms

The EU’s Anti-Money Laundering Authority (AMLA) has removed provisions that could have extended anti-money laundering duties to businesses outside the scope of EU AML law, following concerns from real estate, accounting and other non-financial businesses.

The provisions were part of AMLA’s work on group-wide AML requirements. They could have required franchises, networks, and partnerships to adopt centralized compliance structures even where individual entities were not themselves subject to the EU’s anti-money laundering rules. Businesses in the affected sectors had argued that this would go beyond AMLA’s mandate.

AMLA has instead finalized three sets of regulatory technical standards covering customer due diligence, identifying business relationships and linked transactions, and group-wide AML/CFT arrangements. The standards set requirements for collecting and verifying customer information, including rules for non-face-to-face verification, electronic identification and screening politically exposed persons and their associates.

The group-wide standards also establish requirements for governance, risk management, internal controls and information sharing within covered groups, including measures for subsidiaries and branches in third countries.

AMLA submitted the draft standards to the European Commission on October 1. The Commission still needs to adopt them and publish them in the Official Journal of the EU. Once in force, the standards are generally expected to apply six months later.