The EU’s approach to AML/CFT

Taking into account the 2012 Recommendations of the FATF the EU has been at the forefront of AML/CFT efforts, going further on a number of issues to promote the highest standards for anti-money laundering and counter terrorism financing.

Throughout the years, the EU has published numerous AML/CFT Directives, action plans and legislation, which have been constantly revised in order to mitigate risks relating to money laundering and terrorist financing.

The EU legislation mandates the European Commission to identify high-risk third countries which have strategic deficiencies in their AML/CFT regimes that pose significant threats to the integrity of the EU financial system of the and, therefore, the proper functioning of the EU internal market.

Euro notes
Euros Banknotes
1990
1990

1990

First anti-money laundering Directive adopted by the Commission to prevent the misuse of the financial system for the purpose of money laundering. This legislation has since been constantly revised in order to mitigate risks relating to money laundering and terrorist financing.

2003
2003

December 2003

Adoption of the European Security Strategy by the Council as the EU’s overarching security policy framework and reference document

2005
2005

2005

Adoption of the EU Counter-Terrorism Strategy by the Council, to “fight terrorism and make Europe safer”

2015
2015

2015

Adoption of the 4th Anti-Money Laundering Directive (Directive (EU) 2015/849) on preventing the use of the financial system for money laundering or terrorist financing by the EU Parliament and Council. It becomes one of the pillars of the EU’s legal framework on AML/CFT, along with the Regulation (EU) 2015/847 on information on the payer accompanying transfers of funds, which makes fund transfers more transparent, thereby helping law enforcement authorities to track down terrorists and criminals

2017
2017

2017

Adoption of the Council Conclusions on EU External Action on Counter-Terrorism. They highlight the need to continue prioritising AML/CFT efforts

26 June 2017

26 June 2017

Publication of first Supranational Risk Assessment Report, which assesses the vulnerability of financial products and services to risks of money laundering and terrorist financing. This risk analysis is conceived as a key tool to identify, analyse and address money laundering and terrorist financing risks in the EU

2018
19 June 2018

19 June 2018

Publication of the 5th anti-money laundering Directive (Directive (EU) 2018/843)), which amends the 4th AML/CFT Directive and introduces substantial improvements to better equip the EU with regards to AML/CFT. The Member States had to transpose this Directive by 10 January 2020. 5th anti-money laundering Directive

2019
24 July 2019

24 July 2019

Adoption of a Communication entitled “Towards better implementation of the EU’s AML/CFT framework”  & four reports by the Commission

2020
7 May 2020

7 May 2020

Adoption of ‘Action plan for a comprehensive Union policy on preventing money laundering and terrorist financing’ as part of Commission’s new work programme. This includes a new delegated regulation in relation to third countries with strategic deficiencies in their AML/CFT regimes that pose significant threats to the financial system of the Union (‘high-risk third countries’).

16 September 2020

16 September 2020

Adoption of a report assessing whether Member States have duly identified and made subject to the obligations of the 5th AML/CFT Directive all trusts and similar legal arrangements governed under their laws.

2021
By early 2021

By early 2021

The Commission plans to propose several AML/CFT measures, both legislative and non-legislative

Global aml cft Launch event

Launch of the EU Global Facility on AML/CFT

In 2017, the European Commission established the EU Global Facility on Anti-Money Laundering and Countering the Financing of Terrorism (GF-AML/CFT), as its operational tool to provide demand driven support to third countries based on the deficiencies in their AML/CFT regimes.

The EU GF-AML/CFT seeks to support the adoption by third countries of enhanced measures designed to prevent money laundering and cut off access to funding for individual terrorists and terrorist organisations, through increased compliance with the EU AML/CFT Framework, FATF Recommendations and relevant UN Security Council Resolutions.

By supporting third country efforts to operate more efficient and effective AML/CFT systems and participate in an interconnected AML/CFT global network, the project reinforces European measures aimed at protecting the EU’s financial system. This leads to reduced financial flows from the informal economy and from organised crime to terrorist organisations, hindered use of serious organised crime proceeds and improved asset recovery mechanisms.

Budget:

20 150 000 euros

Duration:

69 months (2017 - 2023)

Financed and managed by

Main objectives

Improve the AML/CFT legislative, regulatory framework

Foster AML/CFT analytical and operational capacity

Improve the effectiveness and efficiency of AML/CFT

Increase awareness of AML/CFT issues and best practices
Provide assistance to improve AML/CFT legislative, regulatory and policy frameworks
Strengthen AML/CFT analytical and institutional capacity
Help improve the effectiveness and efficiency of AML/CFT systems so financial flows from the informal economy and organised crime towards terrorist organisations are reduced, the use of serious organised crime proceeds is hindered and asset recovery mechanisms are improved.
Encourage AML/CFT national, regional and international cooperation and networks
Facilitate AML/CFT dialogue between public authorities, civil society and private sector actors.