The European Union has taken a bold step forward in its ongoing battle against money laundering and terrorist financing with a new regulatory package designed to streamline and strengthen anti-money laundering (AML) efforts across its member states. This updated legislative framework, which is set to be fully enforced by July 2027, marks one of the EU’s most significant and ambitious actions to date in the realm of financial crime prevention and increasing transparency within the financial sector.

Greek banks, like those in other EU member states, are now facing the challenge of aligning with these tougher regulations. The new regulations necessitate that financial institutions across Europe overhaul their compliance frameworks, update internal systems, and incorporate more robust risk-based approaches into their operations. For Greek banks, this represents a substantial shift in how they approach financial crime prevention and transparency. It’s an overhaul that will affect both their technological infrastructure and internal processes as they adapt to these new standards.

The EU’s AML/CFT Framework: Key Legislative Changes

The new EU Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) framework is an intricate and comprehensive set of regulations that aims to harmonize anti-money laundering standards across all EU member states. This includes four key legislative acts that were adopted by the European Council and published in the EU’s Official Journal on June 19, 2024. These are:

1. The Anti-Money Laundering Regulation (AMLR): This regulation aims to enhance the enforcement of anti-money laundering measures and introduce more stringent controls on financial institutions.
2. The Sixth Anti-Money Laundering Directive (AMLD6): Aimed at tightening the existing directives, AMLD6 outlines clear protocols for member states to adopt in relation to criminal activities such as money laundering and terrorist financing.
3. The European Anti-Money Laundering Authority (AMLA): This new authority will play a pivotal role in overseeing compliance and enforcing AML regulations. It will have the power to directly supervise certain high-risk entities while also coordinating efforts with national regulators.
4. The Revised Transfer of Funds Regulation (TFR): Enacted in December 2024, this updated regulation broadens the scope of financial transactions covered by anti-money laundering controls, now including cryptocurrency transactions.

These four pillars represent the EU’s comprehensive approach to curbing money laundering and terrorist financing, with an emphasis on greater transparency, stricter enforcement, and improved cross-border cooperation.

Greek Banks Respond to EU’s Tougher AML Rules

As the EU prepares to enforce its more rigorous AML/CFT regulations by 2027, financial institutions in Greece are already beginning to adapt to these changes. Greek banks have long been active participants in the EU’s financial landscape, and now they are stepping up efforts to comply with the new, tougher AML framework.

For many banks in Greece, the primary focus is on overhauling their internal systems and policies to align with the new legislative requirements. The AML/CFT framework mandates banks to adopt a more comprehensive risk-based approach to customer due diligence, which includes enhancing their Know Your Customer (KYC) procedures and monitoring transactions for suspicious activity. This approach requires banks to make significant investments in technology and compliance infrastructure to ensure they can effectively monitor transactions and identify potential risks in real time.

Strengthening Compliance Policies and Risk-Based Approaches

One of the most notable changes coming as part of the new AML/CFT framework is the push for a more robust risk-based approach to compliance. In the past, many banks followed a more standardized approach to due diligence, applying similar checks and monitoring systems to all customers. However, the new regulations require a more nuanced approach that accounts for the varying levels of risk associated with different customers and transactions.

For Greek banks, this means they must rethink their internal policies and ensure they have the proper systems in place to assess risks on an individual basis. This includes identifying and verifying beneficial ownership for all entities they do business with. This is particularly important as the EU moves to enhance transparency around the ownership structures of corporations and other legal entities. Greek banks must ensure that they can trace the ownership of their clients to prevent illicit activity such as money laundering or terrorist financing.

The Role of the European Anti-Money Laundering Authority (AMLA)

As part of the EU’s efforts to strengthen its oversight of anti-money laundering practices, the European Anti-Money Laundering Authority (AMLA) will play a central role in ensuring consistent enforcement across member states. The AMLA will work closely with national regulators, but it will also have direct supervisory authority over certain high-risk entities. This centralization of enforcement is aimed at addressing the gaps that often exist in national-level compliance and improving the consistency of AML enforcement across the EU.

For Greek banks, this will likely mean an increased level of scrutiny from both national regulators and the AMLA itself. The authority will not only monitor compliance but will also provide guidance and recommendations on best practices for banks to follow in their efforts to prevent money laundering and terrorist financing.

Technological and Procedural Changes to Meet the Revised Transfer of Funds Regulation

In addition to the broader regulatory changes, Greek banks are also preparing for the technical and procedural challenges posed by the revised Transfer of Funds Regulation (TFR). This regulation, which came into force on December 30, 2024, expands the scope of financial transactions subject to AML regulations to include cryptocurrency transactions.

For Greek banks, this marks a significant shift as the EU moves to bring digital assets within the fold of traditional financial regulation. Banks will need to update their transaction monitoring systems to account for cryptocurrency transactions, which can be particularly challenging due to the pseudonymous nature of digital currencies. Ensuring that these transactions are properly monitored and that suspicious activity is detected will require significant upgrades to both technology and procedural protocols.

As part of the revised TFR, Greek banks will also need to ensure that all cross-border transactions are properly reported and that the identities of both senders and recipients are clearly documented. This is a critical part of the EU’s broader efforts to ensure greater transparency in financial transactions and prevent the use of cryptocurrencies for illicit activities.

Conclusion: The Road Ahead for Greek Banks

The introduction of these tougher anti-money laundering regulations represents a major challenge for Greek banks, but it also presents an opportunity for them to enhance their compliance practices, improve transparency, and strengthen their systems against financial crime. By adopting a risk-based approach, enhancing customer due diligence, and investing in new technologies, Greek banks can position themselves to meet the challenges posed by the new AML framework.

With the establishment of the European Anti-Money Laundering Authority (AMLA) and the expansion of the Transfer of Funds Regulation to include digital currencies, banks across Greece and the EU will need to remain vigilant and proactive in their efforts to comply with these new rules. As the enforcement timeline moves toward 2027, Greek banks must continue to make significant strides in updating their internal systems, training their staff, and staying ahead of emerging risks to ensure they are ready for full implementation.

Related Links

• EU Anti-Money Laundering Legislation Overview
• The Role of the European Anti-Money Laundering Authority
• Greece’s Compliance Efforts in the Fight Against Financial Crime
• What the Revised Transfer of Funds Regulation Means for Banks

Other FinCrime Central News Report About European AML Regulation

• How the European AMLA Will Transform Financial Crime Prevention
• EU’s New Anti-Money Laundering Rules: What Banks Need to Know
• ESMA Sets Deadline for Digital Asset Firms to Comply with MiCA

Source: Dnews