The new EU anti-money laundering package not only harmonises and tightens the regulatory framework for the prevention of money laundering; it also broadens the scope of businesses and professional groups that are required to comply with these rules in the first place.

In the first part of our blog series, we provided an overview of the new EU AML package and its three pillars. This second part addresses a question that is even more fundamental for many businesses: Will I be subject to anti-money laundering obligations in future?

AMLR expands the scope of obliged entities

Article 3 of the new EU Anti-Money Laundering Regulation (AMLR – Regulation (EU) 2024/1624) addresses the issue of obliged entities and expands the existing scope to include some rather surprising sectors. In addition to the traditional obliged entities – in particular banks and other financial institutions, solicitors and notaries in certain capacities, tax advisers, estate agents and gambling operators – the new regime will in future cover, amongst others, certain traders in high-value goods, credit intermediaries, crowdfunding providers, certain holding companies and, with a slight delay, football agents and professional football clubs.

High-value goods: From a cash threshold to a sector-based approach

One of the most significant practical extensions concerns the trade in precious metals, gemstones and high-value goods.

Under current Austrian law, traders are generally subject to the anti-money laundering provisions of the Trade Regulation Act if they make or receive cash payments of at least EUR 10,000. The obligation is therefore primarily linked to a specific form and amount of payment. Traders who do not accept such high cash payments have therefore, until now, generally been able to remain outside the existing AML regime.

This approach is fundamentally changed by the AMLR. On the one hand, an EU-wide cap on cash payments will apply from 10 July 2027 (see Article 80 of the AMLR): Persons trading in goods or providing services may, as a general rule, only make or receive cash payments up to EUR 10,000. Cash payments exceeding this amount are therefore, in principle, prohibited – regardless of whether they are made in a single transaction or in several linked transactions. Member States may also set lower thresholds.

However, the AMLR does not merely prohibit large cash payments. For certain goods considered particularly relevant to money laundering, it simultaneously replaces the previous link to large cash payments with a link to the business activity itself. Whether the customer pays in cash or by bank transfer is then, in principle, no longer decisive for determining whether a person is subject to the obligations.

For example, persons who trade in precious metals or gemstones on a regular or full-time basis are designated as obliged entities (see Article 3(3)(e) of the AMLR). The AMLR itself specifies which materials fall under this category: these include, amongst others, gold, silver, platinum and palladium, as well as diamonds, rubies, sapphires and emeralds.

In addition, dealers whose regular or full-time activity consists of trading in so-called ‘high-value goods’ are covered (see Article 3(3)(f) of the AMLR). According to Annex IV of the AMLR, these include:

• Jewellery and gold and silver articles valued at more than EUR 10,000
• watches worth more than EUR 10,000
• motor vehicles with a price of more than EUR 250,000
• aircraft with a price of more than EUR 7.5 million and
• vessels with a price of more than EUR 7.5 million

This is a significant change to the system: until now, a retailer has often been able to avoid being classified as an obliged entity under anti-money laundering legislation simply by refusing to accept large cash payments. In future, such cash payments exceeding EUR 10,000 will in any case be prohibited as a matter of principle – and retailers of certain high-risk goods will be included in the AML regime regardless of the method of payment.

For a trader, therefore, it will no longer make any difference in terms of their status as a regulated entity whether the buyer pays, for example, for a sports car costing EUR 300,000 by bank transfer or in cash. Anyone who trades in the covered goods on a regular basis or as their main occupation will, in principle, fall within the personal scope of the AMLR.

In particular, businesses that have hitherto had little need to concern themselves with anti-money laundering compliance due to a lack of large cash transactions should therefore review their status at an early stage. This is because being an obliged entity entails more than just the obligation to identify individual customers. Rather, it leads to a comprehensive compliance regime involving risk analysis, internal policies and controls, customer due diligence, ongoing monitoring of business relationships, suspicious activity reports, record-keeping obligations and training requirements.

Credit intermediaries – a new group of obliged entities

Another important change concerns intermediaries for mortgage and consumer credit.

Credit intermediaries for mortgage and consumer credit will in future be expressly covered, provided they are not already obliged entities by virtue of being credit or financial institutions (Article 3(3)(k) of the AMLR). Excluded, in particular, are intermediaries who carry out their activities under the responsibility of one or more lenders or credit intermediaries.

This change is also relevant for Austria. Here, credit intermediation may, for example, be carried out as part of commercial financial advisory services. However, under the current legal framework, credit intermediation as such does not yet give rise to a general obligation under the anti-money laundering provisions of the Trade Regulation Act.

The AMLR changes this. Anyone who independently arranges mortgage or consumer loans and does not fall under one of the specified exemptions may, in future, be subject to anti-money laundering obligations solely on the basis of this activity.

This represents a significant development for the businesses concerned: unlike banks, many credit intermediaries do not, by their very nature, currently have an established AML compliance organisation in place. They must therefore assess in good time which structures need to be put in place for the first time by 10 July 2027.

Crowdfunding – explicit inclusion in the AML regime

Crowdfunding is also expressly covered by the AMLR. In future, those subject to the obligations will include both crowdfunding service providers within the meaning of the European Crowdfunding Regulation and so-called ‘crowdfunding intermediaries’.

The second term is broader in scope. In principle, it also covers certain internet-based platforms that bring together project operators and funders, for example for financing through loans or donations.

From an Austrian perspective, however, caution is advised when referring to them as ‘new obliged entities’. Depending on the specific business model, crowdfunding platforms are already subject to anti-money laundering obligations, for example under the FM-GwG or the relevant provisions of the Trade Regulation Act. What is new, therefore, is primarily the explicit and EU-wide uniform inclusion of a broader spectrum of crowdfunding models within the AMLR.

Platform operators will therefore need to carry out a detailed scope analysis of their specific business model: do they already qualify as obliged entities, or does the platform fall within the scope of the regime for the first time due to the expanded definition in the AMLR?

Certain holding companies

Less high-profile, but particularly relevant for corporate groups, is another new category: Article 3(3)(m) of the AMLR also designates so-called ‘non-financial mixed-activity holding companies’ as obliged entities.

Behind this rather cumbersome term may lie a group structure that is certainly relevant in practice. Put simply, this refers to a top-tier holding company which is neither a financial holding company nor a mixed financial holding company, is not itself a subsidiary of another company, and whose subsidiaries include at least one obliged entity from the non-financial sector as defined in Article 3(3) of the AMLR.

This means that, in future, it will not only be an operational subsidiary – for example, due to an activity covered by Article 3 of the AMLR – that may be an obliged entity. Under the conditions set out in the AMLR, the ultimate holding company itself may also fall within the scope of application.

For corporate groups, this is a point that can easily be overlooked. The question “Which of our companies is subject to anti-money laundering obligations?” must therefore not necessarily be confined to the level of the operating company in future. The group structure itself must also be included in the scope assessment.

The specific obligations at group level and how these interrelate with the general group-wide AML requirements of the AMLR will require particular attention in practice.

Investment Migration – new obligations for intermediaries in residence rights

So-called “investment migration operators” are also explicitly included for the first time. The AMLR defines these as providers who represent third-country nationals or offer intermediary services where such nationals wish to obtain residence rights in an EU Member State in return for certain investments.

The AMLR lists possible investments as including, amongst other things, capital transfers, the purchase or letting of property, investments in companies or government bonds, and certain grants.

For the Austrian market, the number of entities falling within this category is likely to be manageable. However, this inclusion clearly highlights the areas on which the European legislator is placing particular emphasis: activities where substantial assets, complex cross-border structures and access to an EU Member State converge.

Football becomes an AML issue – though not until 2029

The inclusion of professional football for the first time has attracted particular media attention.

Under Article 3(3)(n) of the AMLR, football agents will become entities subject to anti-money laundering obligations. This covers natural and legal persons who, in return for remuneration, represent players or professional football clubs in contract negotiations, or clubs in negotiations concerning player transfers.

Professional football clubs will also become entities subject to these obligations, though not in respect of all business transactions. The AMLR covers them in particular in relation to transactions with investors and sponsors, transactions with football agents or other intermediaries, and player transfers.

The background to this lies in the specific risk factors associated with international professional football: high transaction volumes, cross-border payment flows, complex ownership structures and the involvement of a large number of intermediaries.

The AMLR provides for exemptions for smaller clubs. Under certain conditions and on the basis of a proven low risk of money laundering and terrorist financing, Member States may exempt clubs below the top flight, as well as certain smaller top-flight clubs, in whole or in part from these obligations.

And the football industry is granted two years’ more preparation time than the other new entities subject to the rules: Whilst the AMLR is, in principle, to apply from 10 July 2027, the new rules for football agents and professional football clubs will not apply until 10 July 2029.

Not all entities listed in Article 3 of the AMLR are actually new

When analysing Article 3 of the AMLR, it is worth taking a look at the existing legal situation under Austrian and EU law. This is because not all sectors covered by the AMLR are subject to anti-money laundering obligations for the first time:

This applies, for example, to the art trade. Dealers and intermediaries in works of art – including art galleries and auction houses – are already subject in Austria to the anti-money laundering provisions of the Trade Regulation Act if the value of a transaction or linked transactions amounts to at least EUR 10,000. The AMLR retains a corresponding EUR 10,000 transaction threshold but will, in future, base its provisions on the EU-defined term ‘cultural goods’. The material scope of application therefore does not necessarily correspond entirely to the previous category of ‘works of art’.

Providers of crypto-asset services (Crypto Asset Service Providers, or CASPs) are not new obliged entities either. In Austria, they are already expressly subject to the FM-GwG. Under EU law, too, CASPs covered by MiCAR were already included in the scope of entities subject to anti-money laundering obligations prior to the application of the AMLR. With the AMLR, their obligations now form part of the directly applicable European Single Rulebook.

The crucial question is therefore not merely whether a sector is mentioned in Article 3 of the AMLR. Rather, every company must assess whether it is already an obliged entity, whether the material or personal scope of its status as an obliged entity is changing, or whether it will in fact fall under the AML regime for the first time from 10 July 2027.

What should companies potentially affected by these changes do now?

10 July 2027 may still seem a long way off. For companies that have not required an AML compliance system at all to date, however, the time remaining is not long.

The first step should therefore not be the hasty implementation of individual KYC measures, but a thorough scope analysis, followed, where necessary, by a more comprehensive action plan:

• Which of the company’s activities fall under Article 3 of the AMLR?
• Is there already a money laundering obligation in place due to other activities?
• Which companies within a group are affected?
• Is it necessary to set up a complete AML compliance system from scratch, or simply to adapt an existing system to the AMLR?

Only on this basis can a sensible determination be made as to which organisational and technical measures are required in each specific case.

For entities that are actually new to these obligations, the set-up can be considerable. Risk assessment, internal policies and controls, responsibilities, customer identification and identification of beneficial owners, PEP checks, ongoing monitoring, suspicious transaction reports, documentation and staff training must not only exist on paper but also be integrated into actual business processes.

Anyone falling within the scope of the AMLR for the first time should therefore not wait until July 2027, but should start preparations immediately.

Outlook

In the next part of our blog series, we will take a closer look at one of the key obligations facing both existing and new obliged entities: the new requirements for Customer Due Diligence (CDD) and Know Your Customer (KYC) under the European Single Rulebook.