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(1) Directive (EU) 2015/849 of the European Parliament and of the Council constitutes the main legal instrument for the prevention of the use of the Union’s financial system for the purposes of money laundering and terrorist financing. That Directive sets out a comprehensive legal framework, which Directive (EU) 2018/843 of the European Parliament and the Council further strengthened by addressing emerging risks and increasing transparency of beneficial ownership. Notwithstanding the achievements under that legal framework, experience has shown that Directive (EU) 2015/849 should be further improved to adequately mitigate risks and to effectively detect criminal attempts to misuse the Union financial system for criminal purposes and to further the integrity of the internal market.

(2) Since the entry into force of Directive (EU) 2015/849, a number of areas have been identified where amendments would be needed to ensure the necessary resilience and capacity of the Union financial system to prevent money laundering and terrorist financing.

(3) Significant variations in practices and approaches by competent authorities across the Union, as well as the lack of sufficiently effective arrangements for cross-border cooperation were identified in the implementation of Directive (EU) 2015/849. It is therefore appropriate to define clearer requirements, which should contribute to smooth cooperation across the Union whilst allowing Member States to take into account the specificities of their national systems.

(4) This Directive is part of a comprehensive package aiming at strengthening the Union’s anti-money laundering and countering the financing of terrorism (‘AML/CFT’) framework. Together, this Directive and Regulations (EU) 2023/1113 , (EU) 2024/1624 and (EU) 2024/1620 of the European Parliament and of the Council will form the legal framework governing the AML/CFT requirements to be met by obliged entities and underpinning the Union’s AML/CFT institutional framework, including the establishment of an Authority for anti-money laundering and countering the financing of terrorism (AMLA).

(5) Money laundering and terrorist financing are frequently carried out in an international context. Measures adopted at Union level which do not take into account international coordination and cooperation would have very limited effect. The measures adopted by the Union in that field should therefore be compatible with, and at least as stringent as, other actions undertaken at international level. Union action should continue to take particular account of the Financial Action Task Force (FATF) Recommendations and instruments of other international bodies active in the fight against money laundering and terrorist financing. With a view to reinforcing the efficacy of the fight against money laundering and terrorist financing, the relevant Union legal acts should, where appropriate, be aligned with the International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation adopted by the FATF in February 2012 (the ‘revised FATF Recommendations’) and the subsequent amendments to those standards.

(6) Specific money laundering and terrorist financing threats, risks and vulnerabilities affecting certain economic sectors at national level diminish the ability of Member States to contribute to the integrity and soundness of the Union financial system. As such, it is appropriate to allow Member States, upon identification of such sectors and specific risks, to decide to apply AML/CFT requirements to additional sectors than those covered by Regulation (EU) 2024/1624. With a view to preserving the effectiveness of the internal market and the Union AML/CFT system, the Commission should be able, with the support of AMLA, to assess whether the intended application by Member States of AML/CFT requirements to additional sectors is justified. In cases where the best interests of the Union would be achieved by taking action at Union level as regards specific sectors, the Commission should inform the Member State intending to apply the AML/CFT requirements to those sectors that it intends to take action at Union level instead and the Member State should abstain from taking the intended national measures, unless those measures are intended to address an urgent risk.

(7) Certain categories of obliged entities are subject to licensing or regulatory requirements for the provision of their services, whereas for other categories of operators access to the profession is not regulated. Regardless of the framework that applies to the exercise of the profession or activity, all obliged entities act as gatekeepers of the Union’s financial system and must develop specific AML/CFT skills to fulfil that task. Member States should consider providing training to persons wishing to enter the profession of those entities to enable them to perform their duties. Member States could consider, for example, including AML/CFT courses in the academic offer linked to those professions or cooperating with professional associations to train newcomers to those professions.

(8) Where obliged entities are not subject to specific licensing or registration requirements, Member States should have in place systems that enable supervisors to know with certainty the scope of their supervisory population in order to ensure the adequate supervision of such obliged entities. This does not mean that Member States need to impose AML/CFT-specific registration requirements where this is not needed for the identification of obliged entities, as is the case for example where VAT registration enables the identification of operators that carry out activities falling within the scope of AML/CFT requirements.

(9) Supervisors should ensure that, with regard to currency exchange offices, cheque cashing offices, trust or company service providers, and gambling service providers, as well as financial mixed activity holding companies, the persons who effectively manage the business of such entities and the beneficial owners of such entities are of good repute and act with honesty and integrity and possess the knowledge and expertise necessary to carry out their functions. The criteria for determining whether a person complies with those requirements should, as a minimum, reflect the need to protect such entities from being misused by their managers or beneficial owners for criminal purposes. In order to foster a common approach to the verification by supervisors that the management and beneficial owners of obliged entities satisfy those requirements, AMLA should issue guidelines on the criteria to assess good repute, honesty and integrity and the criteria to assess knowledge and expertise.

(10) For the purposes of assessing the appropriateness of persons holding a management function in, or otherwise controlling, obliged entities, any exchange of information about criminal convictions should be carried out in accordance with Council Framework Decision 2009/315/JHA and Council Decision 2009/316/JHA . In addition, supervisors should be able to access all information necessary to verify the knowledge and expertise of the senior management, as well as their good repute, honesty and integrity and that of the obliged entity’s beneficial owners, including information available through reliable and independent sources.

(11) Investor residence schemes present risks and vulnerabilities, in particular, in relation to money laundering, the evasion of Union restrictive measures, corruption and tax evasion which could ultimately give rise to certain risks for the security of the Union. For example, weaknesses in the operation of certain schemes, including the absence of risk management processes or weak implementation of those processes can create opportunities for corruption, whereas weak or inconsistently applied checks on applicants’ source of funds and source of wealth might lead to higher risks that such schemes are exploited by applicants for criminal purposes, aiming to legitimise funds obtained through illicit means. In order to avoid that risks stemming from the operation of such schemes affect the Union’s financial system, Member States whose national law enables the granting of residence rights in exchange for any kind of investment should therefore put in place measures to mitigate the associated risks of money laundering, its predicate offences and terrorist financing. Such measures should include an adequate risk management process, including the effective monitoring of its implementation, checks on the profile of the applicants, including obtaining information on their source of funds and source of wealth, and the verification of information on applicants against information held by competent authorities.

(12) The Commission is well placed to review specific cross-border threats that could affect the internal market and that cannot be identified and effectively combatted by individual Member States. It should therefore be entrusted with the responsibility for coordinating the assessment of risks relating to cross-border activities. Involvement of the relevant experts, such as the Expert Group on Money Laundering and Terrorist Financing and the representatives from the Financial Intelligence Units (FIUs), as well as, where appropriate, from other Union-level bodies including AMLA, is essential for the effectiveness of the process of the assessment of risks. National risk assessments and experience are also an important source of information for that process. Such assessment of the cross-border risks by the Commission should not involve the processing of personal data. In any event, data should be fully anonymised. Union and national data protection supervisory authorities should be involved only if the assessment of the risk of money laundering and terrorist financing has an impact on the privacy and data protection of individuals. To maximise synergies between the assessment of risks at Union and national level, the Commission and Member States should endeavour to apply consistent methodologies.