Anti-Money Laundering: The Outlook for 2025

Review of the most important developments in the field of anti-money laundering in 2024
The year 2024 saw significant progress in combating money laundering at both national and European levels. These developments paved the way for key regulatory changes and laid the foundation for a unified European anti-money laundering strategy, which is examined in detail in the following sections.

The implementations range from mandatory registration in the FIU reporting portal goAML to the decision to locate the new authority AMLA in Frankfurt.

Review of the most important developments in the field of anti-money laundering in 2024

The year 2024 saw significant progress in combating money laundering at both national and European levels. These developments paved the way for key regulatory changes and laid the foundation for a unified European anti-money laundering strategy, which is examined in detail in the following sections.

The implementations range from mandatory registration in the FIU reporting portal goAML to the decision to locate the new authority AMLA in Frankfurt.

The highlights of 2024

January 2024: Entities obligated under the Money Laundering Act had to register in the goAML reporting portal by January 1, 2024. Financial Intelligence Unit (FIU) Register. In 2023, a total of 31.358 obliged entities registered in the reporting portal – this is according to the FIU's annual report. The total number of registered obliged entities has thus more than doubled.

February 2024: The decision to locate the new Anti-Money Laundering Authority (AMLA) fell on Germany, more precisely Frankfurt. This makes Germany the center of European anti-money laundering efforts.[1]

June 2024: The AML legislative package[2], which includes the following components, will be published in the Official Journal of the EU:

• The AMLA Regulation (Regulation (EU) 2024/1620)
• The Money Laundering Regulation (Regulation (EU) 2024/1624)
• The Money Laundering Directive (Directive (EU) 2024/1640)

Key changes include stricter requirements for identifying beneficial owners, which require obliged entities to analyze their customers' ownership and control structures in greater detail. The criteria under which a person is considered a beneficial owner are also changing.

The circle of those obligated is being expanded and now also includes sectors such as art dealers, crowdfunding platforms and football clubs, which must prepare for additional due diligence obligations.

In addition, new compliance requirements are being introduced for obligated entities, including the appointment of a compliance manager and an operational compliance officer. This could necessitate changes to existing internal processes.

The requirements for monitoring and documenting business relationships are being tightened.

November 2024: Italian Bruna Szego has been appointed head of AMLA.[3]With over 400 planned employees and extensive powers in the areas of standard-setting and oversight, AMLA will play a central role. AMLA will commence operations in 2025, with full operational capability planned for 2027.

November 2024: The BaFin published its new General Instructions (GAs) on the Money Laundering Act[4]which will come into effect on February 1, 2025. More information will follow in the section on the 2025 milestones.

Key dates and milestones in 2025

Entry into force of Regulation (EU) 2023/1113 on money transfers

The Money Transfer Regulation (EU) 2023/1113 will apply from 30 December 2024.[5]This regulation obliges payment service providers to transmit detailed information about payers and payees, including for crypto assets. This effectively introduces the FATF's so-called Travel Rule for crypto assets across Europe. The Travel Rule aims to make payment flows traceable.

In Germany, the Travel Rule was already extended to include crypto assets in 2023 through the Crypto W Transfer Ordinance. This new regulation will replace it and will, among other things, entail changes to the scope of information to be exchanged.

The new BaFin guidelines must be applied.

The BaFin's Interpretive and Application Guidelines (AuAs) specify the requirements of the Money Laundering Act and will bring important changes for the entities it supervises from 1 February 2025.

Perhaps the most frequently mentioned change is the shortened update periods for customer data, which must be implemented by July 10, 2027: Customers subject to enhanced due diligence must be reviewed annually instead of every two years, while medium-risk customers will require a review every five years instead of every ten years.

Additional guidelines for verifying beneficial owners clarify that data on the beneficial owner must be collected directly from the contractual partner or the person acting on their behalf. This ends years of ambiguity between sales and compliance departments.

Furthermore, the validity period for extracts from the commercial register was set at three months – in contrast to the previously discussed four weeks. It is also sufficient to identify a fictitious beneficial owner instead of including all persons with influence on the ownership structure.

In the area of ​​name-list screening, obligated entities must engage more intensively with the providers of PEP (politically exposed persons) lists and understand their sources and methodologies. Screening should now be carried out continuously and not only when customer data is updated.

However, it remains unclear whether Adverse Media Screening will become mandatory for all contracting parties or, as before, will only be necessary within the framework of enhanced due diligence obligations.

Federal election and possible consequences

The German federal election in February 2025 could have far-reaching consequences for the regulatory environment. In particular, the planned Financial Crimes Prevention Act (FKBG) is a key focus from a regulatory perspective, as it includes central elements of the national implementation of the AMLA Regulation.

The original plan for the FKBG was to close existing gaps in the fight against money laundering, for example by introducing a central financial crime authority in Germany. This authority would act as a link between national and European institutions and ensure more effective coordination.

Since Germany operates on the principle of discontinuity, according to which laws that have not been passed by the end of the legislative period are discarded, it is likely that the FKBG will not return.

It remains to be seen how anti-money laundering measures will develop in Germany. The priorities set by the new government regarding AML strategies will play a crucial role. Obligated companies should closely monitor these developments in order to react promptly to any necessary adjustments.

The AMLA regulation comes into force

With the AMLA regulation[6] A completely new authority, AMLA, is being established in Frankfurt. Its purpose is to ensure stricter and more uniform measures in the fight against money laundering and terrorist financing across all member states. This authority will primarily supervise 40 high-risk entities in the financial sector directly, while also supporting and supervising national supervisory authorities to guarantee the same high standards everywhere. Simultaneously, it will coordinate the exchange of information between member states and introduce a common IT system for all national Financial Intelligence Units (FIUs).

AMLA also has the power to impose administrative measures on those it supervises – including fines.

The agency is financed by both EU funds and fees levied on financial institutions. Its aim is to consolidate existing national measures, increase their effectiveness, and thus protect the internal market from criminal money flows.

The agency will begin its operational work in 2025 and is expected to be fully functional by 2028.

KYCnow in 2025

We have also set ourselves some goals for the new year in order to take into account the regulatory changes and the requirements of our customers in KYCnow.

This is how our KYC monitoring This functionality is also available in the frontend. This makes it easy to comply with update requirements. Thanks to continuous monitoring of your customers' and business partners' KYC data, you'll never miss a change.

In addition to monitoring, we are also expanding our media screening solution. The integration of powerful AI will further reduce false positives and thus lead to increased efficiency.

We will also be addressing the issue of customer contact in the new year. The planned solution will enable direct customer contact from within KYCnow to obtain and verify necessary information and documents – thus complying with BaFin's requirements.

We look forward to an eventful 2025 with you.

Sources

[1] https://www.consilium.europa.eu/de/press/press-releases/2024/02/22/frankfurt-to-host-the-eus-new-anti-money-laundering-authority-amla/

[2] https://www.europarl.europa.eu/news/de/press-room/20240419IPR20586/neue-eu-vorschriften-zur-bekampfung-der-geldwasche-verabschiedet

[3] https://www.handelsblatt.com/politik/international/bruna-szego-eine-italienerin-soll-europas-oberste-geldwaesche-bekaempferin-werden/100090836.html

[4] https://www.bafin.de/SharedDocs/Downloads/DE/Auslegungsentscheidung/dl_ae_auas_gw.html?nn=19659504

[5] https://eur-lex.europa.eu/legal-content/DE/TXT/?uri=CELEX:32023R1113

[6] https://eur-lex.europa.eu/legal-content/DE/ALL/?uri=CELEX:32024R1620

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