EC ¦ Commission Takes Action to Ensure Complete and Timely Transposition of EU Directives

Commission targets gaps in AML rules as transposition deadlines expire

The European Commission has launched infringement procedures against 18 Member States for failing to fully transpose key provisions of the sixth Anti-Money Laundering Directive, Directive (EU) 2024/1640. The action focuses on rules intended to strengthen beneficial ownership transparency and improve access to ownership information for authorities and other legally entitled users.

Belgium, Bulgaria, Czechia, Germany, Estonia, Greece, Spain, France, Croatia, Cyprus, Lithuania, Luxembourg, the Netherlands, Austria, Poland, Portugal, Romania and Finland have received letters of formal notice. They have two months to respond, complete transposition and notify the Commission of the national measures adopted. If the shortcomings remain unresolved, the Commission may issue reasoned opinions, the next formal stage in an infringement case.

Beneficial ownership data is central to financial crime controls

Reliable beneficial ownership information remains one of the most important tools in the fight against money laundering, terrorist financing and related predicate offences. Criminals frequently use opaque corporate structures, nominee arrangements, trusts and cross-border ownership chains to conceal who ultimately owns, controls or benefits from assets.

The relevant provisions of the sixth AML Directive are designed to ensure access to beneficial ownership registers for competent authorities, self-regulatory bodies, obliged entities and persons able to demonstrate a legitimate interest. This access is material to customer due diligence, transaction monitoring, sanctions screening, asset tracing and the investigation of complex financial crime.

For banks, payment firms, crypto-asset service providers, accountants, auditors, lawyers and other obliged entities, beneficial ownership registers can support – but cannot replace – independent verification. Register data may be incomplete, outdated or inconsistent with client-provided information. Firms must therefore maintain risk-based procedures to identify discrepancies, seek clarification, assess the credibility of ownership claims and report suspicions where appropriate.

Bastian Schwind-Wagner _Follow

"The European Commission’s action against 18 Member States highlights a continuing weakness in the EU’s anti-money laundering framework: rules are only effective when they are fully implemented and applied consistently. Delays in transposing the sixth AML Directive may limit access to beneficial ownership information that is essential for tracing illicit funds and identifying the people behind complex corporate structures.

The issue extends beyond technical compliance. Effective ownership transparency helps financial institutions and enforcement authorities detect proceeds connected to predicate offences such as fraud, corruption, trafficking and illicit drug activity, while supporting stronger cross-border investigations."

Predicate offences drive the AML risk

Money laundering is rarely an isolated activity. It generally follows an underlying crime that produces illicit proceeds, commonly described as a predicate offence. These offences can include fraud, corruption, tax crimes, drug trafficking, human trafficking, cybercrime, environmental crime and illicit drug distribution.

The Commission’s broader infringement activity demonstrates the extent to which AML compliance is tied to other areas of EU law. Measures concerning human trafficking, industrial pollution and newly controlled psychoactive substances have direct relevance for the financial-crime framework because they affect the detection, investigation and prosecution of crimes that can generate criminal proceeds.

The revised Anti-Trafficking Directive, for example, introduces stronger requirements around the criminalisation of new forms of exploitation, including online exploitation, alongside improved victim support and cross-border referral arrangements. Human trafficking networks depend heavily on financial infrastructure to receive, move, store and disguise proceeds. Transaction patterns may include repeated low-value transfers, unusual cash activity, payments linked to high-risk online advertising or accommodation services, and use of accounts controlled by third parties.

Similarly, the inclusion of 2-MMC, NEP and 4-BMC in the EU definition of “drug” extends criminal-law treatment to these psychoactive substances. This can affect the predicate-offence assessment where funds, virtual assets or goods are suspected to be connected to their illicit production, distribution or sale.

Inconsistent implementation weakens cross-border investigations

Financial crime operates across borders faster than national legislative processes. Where individual Member States delay transposition, differences can emerge in access rights, reporting expectations, enforcement powers and the legal basis for information sharing. Such gaps can obstruct investigations involving corporate vehicles established in one jurisdiction, financial accounts in another and criminal conduct in several others.

The sixth AML Directive forms part of a wider EU package intended to create a more consistent anti-money laundering and counter-terrorist financing system. Its gradual implementation is particularly important for beneficial ownership transparency, which has faced legal, operational and privacy-related challenges across Europe.

The quality of implementation matters as much as formal transposition. Registers must contain accurate and current data, competent authorities must be able to obtain information efficiently, and obliged entities need sufficiently clear legal rules for accessing and using the data in their controls. A register that is technically available but difficult to search, weakly verified or rarely updated will offer limited value in practice.

What regulated firms should consider

The infringement procedures do not remove existing AML obligations. Firms should continue to apply their risk-based controls under applicable national law and sectoral requirements, rather than waiting for national implementation to become fully aligned.

In particular, institutions should review whether their beneficial ownership procedures account for multi-layered ownership structures, foreign legal entities, nominee shareholders, trusts and foundations. They should ensure that discrepancies between registry information and customer documentation are documented, escalated and, where required, reported. Enhanced due diligence should be applied where ownership arrangements appear unnecessarily complex, lack an apparent commercial rationale or involve jurisdictions associated with heightened financial-crime risks.

Firms should also assess predicate-offence exposure as part of their customer and transaction risk analysis. Indicators linked to trafficking, illicit drug activity, corruption, environmental offences or fraud should not be treated as separate compliance issues. They are often the source of funds that laundering controls are intended to identify.

A two-month deadline with wider implications

The Member States concerned have two months to address the Commission’s concerns. The immediate issue is the communication of complete national transposition measures. The wider question is whether the EU can achieve the consistent transparency and enforcement standards required to investigate increasingly sophisticated financial crime.

For regulated firms, the direction is clear. Beneficial ownership intelligence, predicate-offence awareness and cross-border cooperation remain core elements of an effective AML programme. Delays in national implementation may create uncertainty, but they do not reduce the operational need to identify who is behind a customer, where the funds originate and whether the activity may be connected to crime.

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