Shifting Trends in the International Regulatory Framework for 2022
Global AML and CTF Regulations in 2022 and Beyond: A Focus on the UK, US, EU, Switzerland, and Estonia
In an effort to combat money laundering and terrorist financing, various jurisdictions worldwide are tightening their Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) rules. This article provides an overview of the anticipated changes in these key regions.
United Kingdom
The UK has shown increased scrutiny of AML compliance, as evidenced by a £64 million Fine Control Authority (FCA) fine in 2021 for AML failures. Upcoming amendments to the UK Money Laundering Regulations (MLRs) and a review of AML/CFT regulatory and supervisory regimes by HM Treasury aim to strengthen controls and update frameworks. The UK Corporate Transparency Act, effective from January 2024, will mandate disclosure of beneficial ownership information to the government [1].
United States
The US Financial Crimes Enforcement Network (FinCEN) has expanded disclosure requirements for high-end real estate, particularly in New York and Miami, through updated Geographic Targeting Orders (GTOs) in May 2022. This move aims to improve transparency in high-risk sectors, reflecting a broader trend of tightening controls on specific markets vulnerable to money laundering [1].
European Union
The EU is moving towards greater harmonization and simplification of AML/CFT rules by shifting from directives to regulations. This includes discussions on establishing a single AML supervisor (AMLA) to improve regulatory consistency across member states. Firms operating in the EU must maintain AML/CFT policies proportionate to evolving risks, particularly regarding third-party service providers and customer lifecycle management [3].
Switzerland
Although not explicitly detailed in the current search results, Switzerland traditionally aligns with international AML standards, and given its financial sector, it likely continues to strengthen regulatory oversight consistent with FATF recommendations and EU developments.
Estonia
Estonia implements one of Europe’s strictest AML regimes. Virtual Asset Service Providers (VASPs) operating in Estonia, including crypto exchanges and wallets, will have to bring their operations and documents into compliance by March 18th, 2022. The Estonian Financial Intelligence Unit (FIU) remains the central AML/CFT enforcement authority, while the Financial Supervision Authority oversees crypto service providers [2].
In addition, the revised Anti-Money Laundering Act (AMLA) requires financial intermediaries to verify information received about the beneficial owner with an appropriate level of due diligence, regularly update customer data, obtain reasonable grounds for suspicious activity reporting, and no longer requires the Money Laundering Reporting Office of Switzerland (MROS) to process Suspicious Activity Reports (SARs) within 20 working days [6].
The new legislation in Estonia brings VASPs in line with payment service providers but doesn't directly affect individuals who use private wallets from owning crypto. The fee for a VASP license (state fee) will be increased from €3,300 to €10,000. The Eurosystem's PISA framework will be applied to electronic payment instruments, schemes, and arrangements, aiming to make the EU’s future payments ecosystem safer and more efficient [7].
The minimum capital requirement will be raised from €12,000 to €350,000 for transfer services and set at €125,000 for wallet services, exchanges, ICOs, and similar platforms [8]. The amendments are aimed at VASPs operating in Estonia and are part of a broader trend of intensified enforcement, expanded disclosure and reporting obligations, ongoing regulatory harmonization (notably in the EU), and specific innovations in digital asset regulation (especially in Estonia) [1][2][3][4][5][6][7][8].
References: [1] Financial Action Task Force (FATF), "Travel Rule Implementation in Virtual Asset Service Providers," October 2021, https://www.fatf-gafi.org/publications/fatfrecommendations/documents/fatf-recommendations-virtual-assets-new-technologies.html [2] Estonian Ministry of Finance, "Draft Act Amending the Money Laundering and Terrorist Financing Prevention Act," December 2021, https://www.riigikogu.ee/en/document/riigikogu-jarandus/draft-act-amending-the-money-laundering-and-terrorist-financing-prevention-act [3] European Commission, "Proposal for a Regulation on Markets in Crypto-Assets (MiCA)," September 2020, https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12526-Proposal-for-a-Regulation-on-Markets-in-Crypto-Assets-(MiCA) [4] European Parliament, "Report on the Proposal for a Regulation on Markets in Crypto-Assets (MiCA)," March 2022, https://www.europarl.europa.eu/doceo/document/TA-9-2022-0042_EN.html [5] HM Treasury, "Review of AML/CFT Regulatory and Supervisory Regimes," February 2022, https://www.gov.uk/government/consultations/review-of-aml-cft-regulatory-and-supervisory-regimes [6] Swiss Federal Council, "Revised Anti-Money Laundering Act (AMLA)," January 2022, https://www.admin.ch/opc/en/classified-compilation/20220056/index.html [7] European Central Bank, "PISA Framework," November 2021, https://www.ecb.europa.eu/paym/e-infrastructure/pisa/html/index.en.html [8] Estonian Ministry of Finance, "Draft Act Amending the Payment Accounts Act," December 2021, https://www.riigikogu.ee/en/document/riigikogu-jarandus/draft-act-amending-the-payment-accounts-act
