The EU AML package was published in the Official Journal of the European Union on 19 June 2024. The majority of the regulations contained therein will apply from 10 July 2027 and will replace the existing national anti-money laundering legislation.
Background
The EU AML package consists of the following components:
- The EU Anti-Money Laundering Regulation (EU) 2024/1624, which is directly applicable in the member states and will largely replace the Anti-Money Laundering Act (GwG) in Germany from 10 July 2027, represents the core of the new regulation. It defines the group of obliged entities and their core obligations;
- The 6th Anti-Money Laundering Directive (EU) 2024/1640, which is to be transposed into national law, contains “formal” requirements for mechanisms to combat money laundering and terrorist financing, such as provisions on the establishment of registers of beneficial owners, financial intelligence units (FIUs) and cooperation between supervisory authorities;
- The AMLA Regulation (EU) 2024/1620 establishes the European Anti-Money Laundering Authority Regulation (the “AMLA”), which will be based in Frankfurt am Main, and defines, among other things, the main tasks and powers of the authority, which is to start directly supervising certain high-risk financial institutions from 2028.
Essential contents
The EU Anti-Money Laundering Regulation defines who is an obliged entity under the EU AML Package.
For the purposes of the EU Money Laundering Regulation, insurance intermediaries are deemed to be so-called financial institutions and therefore obliged entities under money laundering law if they act “in connection with life insurance and other investment services“. Exempted are insurance intermediaries who act under the responsibility of one or more insurance companies or intermediaries for the products that concern them (= tied intermediary, cf. Section 34d para. 7 no. 1 of the German Trade Regulation Act (GewO)) and do not collect premiums or amounts intended for the customer (Art. 2 para. 1 no. 6 lit. c AMLR).
With the EU Anti-Money Laundering Regulation, credit intermediaries are subject to broad money laundering obligations for the first time. If they hold sums of money in connection with the loan agreement, they are considered to be financial institutions subject to money laundering obligations per se (Art. 2 para. 1 no. 6 lit. h of the EU Anti-Money Laundering Regulation). In addition, intermediaries of consumer and mortgage loans that are not credit or financial institutions are also subject to anti-money laundering obligations (Art. 3 No. 3 lit. k EU Anti-Money Laundering Regulation). Credit intermediaries who carry out their activities under the responsibility of one or more lenders or credit intermediaries are exempt from the obligation.
Exception for tied credit intermediaries?
The exception (“credit intermediaries carrying out activities under the responsibility of one or more creditors or credit intermediaries“) is likely to refer to the so-called “tied credit intermediary” within the meaning of Art. 4 para. 7 of the Residential Property Credit Directive (Directive 2014/17/EU) (“…credit intermediary acting on behalf of and under the full and unconditional responsibility of…”). This is supported by the reference in Art. 2 para. 1 no. 6 lit. h EU Money Laundering Regulation to Directive 2014/17/EU.
This is formulated in a weakened form in Recital 22 of the EU Anti-Money Laundering Regulation, which shows that a loan broker should not be an obliged entity under money laundering law if he acts “on behalf” of the credit institution. This wording is again reminiscent of constellations of representation. However, the stricter wording in the actual definition of a credit intermediary (“under the responsibility“, Art. 3 para. 3 lit. k EU Anti-Money Laundering Regulation), i.e. the requirement of an actually bound credit intermediary (not just a contractual agreement between the credit institution and the intermediary, which “only” establishes “acting on behalf”), is likely to be decisive.
In German (commercial) law, however, this tied credit intermediary is a foreign concept. Unlike, for example, § 34d para. 7 GewO (tied insurance intermediary), § 34c GewO (loan intermediary, among others) does not recognise a tied credit intermediary. This is also the judgement in the literature:
“In practice, there is probably legal uncertainty as to whether the legal figure of the tied credit intermediary exists in Germany, since according to the explanatory memorandum to the ImmVermV issued by the Federal Ministry for Economic Affairs and Energy and some chambers of industry and commerce, the prevailing view is that the tied credit intermediary does not exist in Germany and that this is a figure that is only known abroad” (König, ZVertriebsR 2016, 350, 351).
Outlook
In some EU member states, loan brokers have always been subject to money laundering legislation. The EU legislator has made it clear that it wishes to orientate itself on these autonomous approaches and harmonise them. It is explicitly focussing on consumer and mortgage credit intermediaries, which “have not been subject to anti-money laundering and terrorist financing requirements at Union level to date, but have been subject to corresponding obligations in some Member States due to their exposure to money laundering and terrorist financing risks” (Recital 17 to the EU Anti-Money Laundering Regulation) – following the example of these Member States, consumer and mortgage credit intermediaries will be subject to broad anti-money laundering obligations in future under the EU Anti-Money Laundering Regulation.
The new obliged entity perspective of the credit intermediary is also likely to be relevant for those companies that (as insurance intermediaries) broker both insurance products relevant under money laundering law and (as loan/credit intermediaries) loans issued by credit institutions – and thus previously excluded from Section 2 para. 1 no. 8 AMLA – and whose obligations under money laundering law now also extend to this bank loan brokerage for the first time.
However, it is unclear whether these insurance and loan brokering companies should actually be subject to a “double” obligation across the board. The wording of the EU Anti-Money Laundering Regulation may contradict itself here: According to Art. 3 No. 3k AMLD, mortgage and consumer credit intermediaries subject to anti-money laundering obligations are companies “that are not credit institutions or financial institutions” (i.e. credit intermediaries that do not hold funds in connection with the credit agreement and are therefore not considered to be a financial institution per se under anti-money laundering law pursuant to Art. 2 para. 1 No. 6 lit. h) AMLD). However, the insurance intermediary is only an obliged entity under money laundering law when it becomes a financial institution through the brokerage of life insurance or investment products (Art. 2 para. 1 no. 6 lit. c EU Money Laundering Regulation).
The category of the so-called tied loan broker basically corresponds to the tied insurance intermediary in terms of the regulatory approach. In the absence of a specific ordinance or statutory regulation, cf. section 34c GewO, the exception in Germany is likely to come to nothing.
It remains to be seen whether and how the AMLA will position itself on these issues.
