• Legal basis
This proposal for a Directive is based on Article 114 TFEU, the same legal basis as the current EU AML/CFT legal framework. Article 114 is appropriate considering the significant threat to the internal market caused by money laundering and terrorist financing, and the economic losses and disruption on a cross-border level which it can create.
• Subsidiarity
In accordance with the principles of subsidiarity and proportionality as set out in Article 5 of the Treaty on European Union, the objectives of the proposal cannot be sufficiently achieved by Member States and can therefore be better achieved at the Union level. The proposal does not go beyond what is necessary to achieve those objectives.
The 2019 Commission AML package highlighted how criminals have been able to exploit the differences among Member States’ AML/CFT regimes. Flows of illicit money and terrorist financing can damage the stability and reputation of the Union financial system and threaten the prope
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