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Companies operating in the European Union will face stricter money laundering rules under a new framework agreed by the Council and Parliament.

The new regulations will require enhanced due diligence for crypto-asset service providers (CASPs), transactions for high-risk third countries, and luxury goods traders.

Each member state’s Financial Intelligence Unit (FIU) will have new powers for “immediate and direct” access to financial, administrative and law enforcement records.

This will include tax data, records on funds frozen due to sanctions and information on fund and crypto transactions.

FIU’s will also have the right to suspend or withhold consent for a transaction to assess whether it is suspicious or not.

The new rules also aim to ban any cash transaction in excess of €10,000 and impose new transparency rules on beneficial ownership – that being the individuals who control assets under a different name.

Cryptocurrencies covered under regulations

Under the new framework, CASPs will be categorised as “obliged entities”, which will require them to conduct due diligence on their customers.

This will mean crypto companies will need to engage in know-your-customer (KYC) practices, including verifying information and reporting suspicious activity.

The rules state that a CASP will need to apply this due diligence for transactions over €1,000. The framework also adds measures to mitigate money laundering risk for transactions with self-hosted wallets.

Additional due diligence requirements will be required for cross-border correspondent relationships for crypto assets.

After the wording of the framework is finalised it will be presented to the representatives of EU member states for approval.

If approval is granted, the Council for Europe and Parliament will formally adopt the texts prior to their publication in the EU’s Official Journal.

When the rules were originally floated in 2022, the European Gaming & Betting Association (EGBA) created guidelines to help gambling businesses navigate the changing rules.

“As the sophistication of financial crime continues to evolve, the publication of these AML guidelines demonstrates EGBA’s commitment to ensure that Europe’s online gambling sector actively contributes towards the fight against financial crime,” said EGBA director of legal and regulatory affairs Dr Ekaterina Hartmann at the time.

“There’s currently a lack of sector-specific guidance to help Europe’s online gambling operators in their AML compliance efforts and these guidelines provide a valuable tool to fill this gap and help operators achieve the highest possible standards.”

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