• Legal basis
The proposal is based on Article 114 TFEU, the same legal basis as the current AML/CFT legal framework. Article 114 has been found appropriate for AML/CFT legislation considering, on the one hand, that a divergent development of national laws could disrupt the orderly functioning of the internal market; on the other hand, that money laundering and terrorism financing activities could try to take advantage of the free movement of capital and of the freedom to provide financial services, thereby causing economic losses, disruption of functioning of the single market, and reputational damage at the level of the Union.
It is settled law that the EU legislature, acting under Article 114 TFEU, may deem it necessary to provide for the establishment of an EU body responsible for contributing to the implementation of a process of harmonisation [Case C-217/04 United Kingdom v Parliament and Council EU:C:2006:279, paragraph 44, and Case C-270/12 United Kingdom v Parliament and Cou
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