Overview of the new draft law on anti-money laundering

On June 19, 2024, Regulation 2024/1624 of the European Parliament of May 31, 2024 on preventing the use of financial systems for money laundering purposes was published in the Official Journal of the European Union. The new law establishes the main principles for combating money laundering, including through the use of various migration programs. The regulation will apply from 2027, 3 years after its official entry into force.

The law establishes

• measures applied by EU member states to counter money laundering;
• requirements for beneficiaries to confirm the transparency of the origin of funds;
• measures to limit the misuse of anonymous instruments.

Importance

This law also applies to notaries, law firms and lawyers engaged in private practice in terms of providing services for transactions related to the purchase and sale of real estate. These measures will affect the following areas:

• banking (opening and management of bank accounts);
• real estate (purchase and sale of real estate);
• migration (obtaining residence permit for the purchase of real estate).

In paragraph I, part 3, article 3 of the Regulation for the first time mentions operators providing services for obtaining residence permits for investments:

investment migration operators permitted to represent or offer intermediation services to third-country nationals seeking to obtain residence rights in a Member State in exchange for any kind of investment, including capital transfers, purchase or renting of property, investment in government bonds, investment in corporate entities, donation or endowment of an activity to the public good and contributions to the state budget.

Additional innovations

• Restriction on cash payment transactions. A maximum limit at EU level of €10,000 is set for cash payments. Member States will have the possibility to set a lower maximum limit if they deem it necessary, based on specific national risks;
• Obligated entities should verify whether beneficial owners are subject to targeted financial sanctions. In the context of legal persons, both natural and legal persons who control a legal person or hold more than 50% of the ownership or controlling interest in that legal person, whether individually or collectively, should also be screened against targeted financial sanctions lists;
• Establishment of an Anti-Money Laundering Authority (“AMLA”) that will begin direct supervision of obliged entities in 2028;

Law will introduce many changes not only in the EU legislation, but also in the national legislation of the countries. We should expect stricter requirements for applicants for residence permits for investments, or for persons receiving residence permits for starting a sole proprietorship/company.

Authors: Yaroslavna Zadesenskaya, Levan Pogosov

Dear journalists, the use of materials from the REVERA website in publications is possible only with our written permission.

To coordinate materials, contact us at e-mail: i.antonova@revera.legal or Telegram: https://t.me/PR_revera