2024 AML Regulations in Review and Roadmap for 2025

It also established a new EU AML Authority (AMLA) to oversee compliance and enforcement across member states. This is a global problem, so it must be tackled internationally, which means new EU AML directives must be followed across the region while staying in sync with AML regulation updates elsewhere. In 2023, Danske Bank was fined over $2.2 billion for AML failings, while AML violations cost OKX Crypto Exchange over $500 million two years later. These are just two of the many fines recently issued to major financial institutions, highlighting how important it is for companies to follow AML guidelines. The Dutch AML Act currently has an exemption for electronic money institutions insofar they solely carry out transactions related to payment instruments which can be used within a limited network only. AIOZ coin is a cryptocurrency powering the AIOZ Network, a decentralized content delivery network.

While the implementation of AML regulations has undoubtedly increased the compliance burden on financial institutions, it has also strengthened the overall integrity of the financial system. By deterring curacao casino license and detecting illicit activities, AML regulations contribute to maintaining the stability and trustworthiness of the banking industry. To cope with the growing complexity of AML regulations, financial institutions have turned to advanced technologies to enhance their compliance efforts. Artificial intelligence (AI), machine learning, and robotic process automation are being increasingly adopted to automate processes, improve efficiency, and strengthen AML compliance programs. To successfully navigate the regulatory challenges of 2025, financial institutions need a solution that unifies compliance processes, harnesses AI for real-time monitoring, and simplifies adherence to complex and evolving regulations.

Being added to the FATF blacklist can have severe consequences for a country’s economy and international relationships. Financial institutions operating within these blacklisted jurisdictions may face increased scrutiny and restrictions, making it challenging to conduct business globally. As cryptocurrency markets mature, regulatory frameworks have become increasingly stringent.

Overview of the regulatory shifts

When such activities are detected, organizations must submit suspicious activity reports (SARs) to the appropriate regulatory authorities. Under AMLD6, the FIUs will play a central role in the EU’s efforts to combat money laundering and terrorist financing. For example, the FIUs will be granted direct access to all information they require for fulfilling their tasks, such as administrative, financial, and tax information and relevant central registers. Furthermore, if FIUs have a suspicion that a transaction relates to money laundering or terrorist financing, FIUs are empowered to take action, or to suspend or withhold consent to that transaction. It should be assessed how this will work in practice, due to the current practice that the FIU is often notified after a transaction is already performed. PSD2 created an atmosphere in which banking as we know it has changed dramatically by advancing open banking across Europe.

The AML Regulation (AMLR): The Single Rulebook

In response, HSBC undertook a significant overhaul of its compliance systems, investing over $1 billion in advanced monitoring technology, hiring compliance professionals, and training staff. While these measures strengthened HSBC’s AML framework, they also resulted in substantial operational costs. By 2030, regulatory convergence is anticipated as international bodies coordinate standards.

The BSA has undergone continuous development and modifications over time to provide regulatory agencies with effective anti-money laundering tools. Money laundering and terrorism financing are complex and ever-evolving problems that transcend national boundaries. Criminal organizations and terrorist groups exploit the vulnerabilities of interconnected networks to transfer funds anonymously and disguise illicit transactions (Sanction Scanner). Individual countries face challenges in combating these financial crimes alone due to the globalization of financial systems.

• Understanding global AML regulations, the role of the FATF, and the importance of the FATF recommendations is essential for professionals working in compliance, risk management, anti-money laundering, and anti-financial crime.
• These regulations are designed to prevent illicit activities, safeguard the integrity of the financial system, and protect businesses and individuals from the harmful effects of financial crimes.
• Stricter requirements apply to Asset-Referenced Tokens (ARTs) and E-Money Tokens (EMTs) due to their potential impact on financial stability.
• Regulatory bodies also expect organisations to demonstrate that their risk assessment and management processes are robust, effective, and tailored to their specific risk profiles.

The EU’s Anti-Money Laundering Directive was first introduced in 1991 and has since undergone several updates, with the most recent ones in 2015 and 2018. The EU directives require financial institutions to implement measures to prevent money laundering and terrorist financing. The EU AML directives have had a significant impact on shaping AML regulations across Europe (Fintech Global). To effectively combat money laundering on a global scale, international collaboration plays a crucial role. Various stakeholders, including regulatory bodies, financial institutions, and technology providers, work together to strengthen anti-money laundering (AML) efforts worldwide. In this section, we will explore the importance of collaboration, the role of technology, and cooperation among regulatory authorities in the fight against money laundering.

We could also see new Trump appointees alter the direction of agencies’ supervisory practices and examination priorities related to AML. The implications of these shifts are still unclear, but may signal to the financial services market to adopt greater business risks for potentially higher rewards. Additionally, the Treasury Department has been working diligently to close key AML coverage gaps related to residential real estate transactions and investment advisers.

To strengthen financial integrity and prevent the use of the system for financial crime,  the Recommendations provide for Politically Exposed Persons, Beneficial Ownership, and Financial Sanctions, as part of the regulatory compliance mechanism. The Council of the European Union’s AMLD, a directive that sets out AML/CFT requirements for all EU member states, has been amended several times to reflect the changing risks of money laundering and terrorist financing. The Basel Committee on Banking Supervision’s CDD for Banks provides detailed recommendations for banks on how to identify and verify the identity of their customers.

These are generally understood as being comprised of those financial firms operating across borders that have been assessed as posing a high AML/CFT risk. RTS will standardise the methods and benchmarks used by NCAs to categorise the risk and categorisation criteria of such financial institutions. AMLA and NCAs should not have any discretion in determining the list of financial institutions that are subject to direct supervision. The list will undergo a comprehensive evaluation every three years.The European Commission had deliberated the possibility of subjecting all significant or transnational financial institutions to EU-level supervision for AML/CFT measures. The selection process which will be set out in full in the RTS will rely on objective criteria related to risk categorisation and cross-border activity, in order to achieve equitable and unbiased selection. These will take the form of Implementing Technical Standards (ITS) and Regulatory Technical Standards (RTS).

The Financial Conduct Authority FCA is mandated to regulate the UK’s financial sector and implement measures to combat money laundering and terror financing. The U.S.A. has a comprehensive framework for monitoring and tackling money laundering, terrorist financing, financial fraud, and sanctions, with inter-agency coordination and surveillance. Only under the Anti-Money Laundering Act of 2020 did U.S. companies become legally required to comply with financial screening regulations that apply to fiat currencies and tangible assets. Businesses that exchange or transmit virtual currencies now qualify as regulated entities and must register with FinCEN, adhere to AML and CFT laws, and report suspicious customer information to financial regulators. Reports of human trafficking and modern slavery increased by 12% in 2024, with 382 cases flagged by law enforcement. These figures highlight the urgency of robust AML frameworks to ensure businesses stay ahead of evolving regulatory demands.