These far-reaching proposals, which include a Regulation on AML/CFT and the 6th AML Directive (AML6D), will have a geographic impact that will extend across the EU, UK and to third-party countries. The impact will also reach industries ranging from the "traditional" financial institutions to gaming, crypto, real estate, and more. And with a periodic open review process to define the offenses to be focused on by the governing authorities, this initiative will be a continuing work-in-process that constitutes the biggest ever overhaul to the EU's AML regime.

The proposals are a facelift to the existing regime with the introduction of new rules, updates and enhancements of the current requirements. The novel approach to supervision will be one of the biggest changes, with the establishment of a new AML Authority (AMLA) and an EU-wide Financial Intelligence Unit (FIU) to act as a coordination and support mechanism sitting over EU member states. This will align the current differences of approach to supervision.

Another fundamental shift is the potential for the current AML risk-based approach to move towards harmonized AML rules. To some extent, that risk approach permitted inconsistencies that promoted regulatory shopping between jurisdictions. Guidance from AMLA about the extent to which firms can and should apply the rules would be beneficial within the EU and to countries outside of the EU that are engaged in the web of global money movement.

From a timing perspective, AMLA is staffing up in 2023, with general activities expected to launch in 2024 and 2025, a heartbeat in time from our doorstep. It is in this context that we highlight below some key points that arise from the new package that firms should be engaging on to consider how these revisions could impact their current AML/ CFT approach.