AMLR Reporting Obligations

We continue our blog series on the AMLR. Having previously analysed the rules on transparency in relation to beneficial ownership, the focus now turns to reporting obligations. This marks a clear shift from identifying, analysing and documenting information to taking active steps in response to it. For obliged entities, this creates a substantial need for well-functioning internal processes, clear allocation of responsibilities and robust administrative AML measures.

Articles 69–74 form the core of Chapter V of the AMLR and regulate how suspicious transactions are to be identified, reported and managed, as well as the legal framework for information sharing and liability. Together, these provisions establish a system designed to ensure that relevant information reaches financial intelligence units promptly and in a usable format, while maintaining legal certainty and protection for reporting actors.

Against this background, access to qualified, AMLR-adapted compliance support is critical. Morling Consulting assists businesses with legal guidance on translating regulatory requirements into practical and effective procedures.

Article 69 – Reporting Obligations

Article 69 is a central provision of the AMLR and regulates the obligation for companies to report suspicious activity to the financial intelligence unit. The article establishes that obliged entities, including board members and employees in certain cases, must cooperate with the financial intelligence unit.

The reporting obligation is triggered when the company knows, suspects or has reasonable grounds to suspect that funds or activities are linked to proceeds of criminal activity, namely predicate offences to money laundering, terrorist financing or other criminal activity. Obliged entities must act directly and on their own initiative notify the financial intelligence unit of such suspicion and provide the financial intelligence unit with further information upon request. The reporting obligation also includes providing all necessary information to the financial intelligence unit, including transaction data.

This is therefore not a matter of proving an offence, but of responding to suspicions. In practice, this means that companies must not only be able to identify unusual behaviour, but also quickly retrieve and compile relevant information. Deficiencies in internal systems or unclear allocation of responsibility may therefore in themselves constitute a compliance risk. The provision also covers not only completed transactions, but also attempted transactions and situations where customer due diligence cannot be achieved.

Article 69.1 also regulates the applicable timeframes. As a general rule, obliged entities must respond to a request from the financial intelligence unit within five working days, but in urgent cases the deadline may be significantly shortened. In certain situations, the financial intelligence unit may also allow a longer response period, provided that this does not adversely affect the analysis in any way.

Article 69.2 further describes how companies should proceed when determining whether something is suspicious. The assessment of transactions or activities must be based on all relevant information and facts available to the company. Where the obliged entity suspects a transaction or activity, the suspicion must be based on several factors, including the customer’s profile, the size and nature of the transaction or activity, how transactions are connected, and where the funds originate from and where they are going. A transaction that deviates from what is normal for the customer may also be an important indicator. The assessment must also be adapted and prioritised according to the urgency of the situation and the risks affecting the Member State in which the entity is established.

Article 69.6 clarifies that the compliance officer of the obliged entity is responsible for forwarding the report to the financial intelligence unit in the Member State where the company is established. The provision clarifies internal responsibility and the importance of a clear organisation around AML work. Obliged entities must ensure that the compliance officer and other employees are not subjected to reprisals or adverse treatment when fulfilling their reporting obligations. This is an important part of the system, as otherwise there is a risk that suspicions will not be reported due to fear of internal consequences.

Articles 69.8 and 69.9 concern situations where several companies cooperate, for example through information exchange. If a suspicion arises in such a context, the companies may designate one of them to submit a joint report to the financial intelligence unit. The report must then include information on all obliged entities involved. Where the obliged entities are established in several different Member States, the reporting obligation must extend to each Member State concerned.

If the companies instead choose to report separately, it must be stated that the suspicion arose within the framework of cooperation. The companies are also required to retain copies of these reports in accordance with the applicable rules on data retention under Article 77.

Article 70 – Specific Provisions

Article 70 establishes an exception to the reporting obligation under Article 69. Where permitted by Member States, certain professional groups may instead report suspicions through a self-regulatory body, such as a supervisory body. This body must be designated by the Member State and must in turn promptly forward the information to the financial intelligence unit without altering its content.

Article 70.2 is central to certain professional groups, including lawyers, auditors and tax advisers. The provision states that the reporting obligation does not apply where the information has been obtained in connection with assessing a client’s legal position or representing the client in legal proceedings. At the same time, the article contains an important exception to the exception. The exception is not absolute and must not apply where the obliged entities concerned:

• are involved in criminal activity, including predicate offences to money laundering, money laundering or terrorist financing,
• where the advice is used to enable predicate offences to money laundering, money laundering or terrorist financing,
• understand that the client wishes to use the advice for criminal purposes.

In these cases, reporting must take place.

Article 70.3 allows Member States to limit the exception under Article 70.2 in certain situations, particularly where the risks of money laundering or terrorist financing are considered high. Member States may also introduce additional reporting obligations for obliged entities covered by the exceptions. This means that the rules may in practice become stricter in an individual country, depending on national decisions.

Article 71 – When Transactions Must Not Be Carried Out

Article 71 regulates a material issue, namely when a transaction must not be carried out. The article provides that if an obliged entity knows or suspects that a transaction is linked to proceeds of criminal activity or terrorist financing, the entity must refrain from carrying out the transaction until a report has been submitted to the financial intelligence unit and any instructions have been followed.

If the obliged entity has not received instructions from the financial intelligence unit to refrain from carrying out the transaction within three working days from submitting its report, the obliged entity may carry out the transaction after assessing the existing risks.

At the same time, Article 71 contains an important exception. If it is not possible for the obliged entity to refrain from carrying out a transaction, or if refraining could reveal an ongoing investigation and undermine attempts to investigate the persons linked to the suspicious transaction, the transaction may be carried out. This is, however, subject to the financial intelligence unit being informed immediately afterwards.

The provision creates a direct link between the reporting of suspicions and business decisions. In practice, this may mean that transactions need to be discontinued or that the provision of services in customer relationships is delayed.

Article 72 – Protection for Reporting Actors

Article 72 contains fundamental protection for those who report suspicions. The provision states that reporting in good faith does not constitute a breach of confidentiality and does not give rise to liability. Where an obliged entity, an employee or a board member discloses information to the financial intelligence unit in good faith, this is not deemed to constitute a breach of confidentiality, irrespective of whether the duty of confidentiality arises under contract, law or other regulation.

Article 72 also provides that the obliged entity, employee or board member must not incur any liability. The protection applies even where the suspicion is based on the person not being aware of the criminal activity behind the transaction, and regardless of whether any unlawful activity existed at all, that is, where the suspicion later proves to have been incorrect. The decisive factor is that the report was made in good faith.

Article 72 is a fundamental prerequisite for the functioning of the regulatory framework. Without such protection, the risk of legal consequences could deter individuals from reporting suspicions.

Article 73 – Prohibition on Disclosure

Article 73 contains the prohibition on disclosing information. The provision establishes that obliged entities, including board members, employees, agents and distributors, must not disclose to or inform the customer or a third party that transactions are being assessed under Article 69, that a report is being considered or that a report has already been submitted. This also includes the entity being prohibited from disclosing that information is being forwarded or that an AML/CTF analysis is being carried out. The purpose is to prevent the customer from being warned and thereby adapting their behaviour, removing evidence or otherwise obstructing the work of the authorities.

Despite the main rule under Article 73.1, there are several important exceptions where information sharing is permitted under Article 73.2. The prohibition on disclosure does not apply where information is provided to competent authorities and to self-regulatory bodies in their supervisory role. The same applies where the information is used within the framework of the investigation and prosecution of offences.

Article 73.3 establishes that information may be shared between companies within the same group, including branches and subsidiaries in third countries, provided that the entire group applies common AML procedures and that these policies and procedures meet the requirements of the regulatory framework.

Information may also be shared between certain types of obliged entities, such as lawyers, advocates or auditors, or third-country entities that apply equivalent requirements to those laid down under the AMLR. This is subject to the obliged entities operating within the same organisation or network and having common ownership, management or compliance functions.

Article 73.5 addresses the situation where one and the same transaction involves several obliged entities. In such cases, the entities may share information with each other if they are established within the EU or in countries with regulation equivalent to the AMLR, and if they are subject to rules on confidentiality and personal data protection. This is particularly relevant in complex transactions involving several actors, such as banks, advisers and financial institutions.

Finally, Article 73.6 provides that if obliged entities attempt to dissuade a customer from carrying out an unlawful act, this is not deemed to constitute prohibited disclosure of information.

Article 74 – Threshold-Based Reporting

Article 74 introduces a specific reporting obligation for persons trading in high-value goods which is not based on suspicion, but on the value of the transaction. Such persons are required to report all transactions involving the sale of certain high-value goods. The reporting obligation applies to the following goods, provided that the goods are acquired for non-commercial purposes:

• Motor vehicles at a price of at least EUR 250,000, such as luxury cars.
• Watercraft at a price of at least EUR 7,500,000, including boats.
• Aircraft at a price of at least EUR 7,500,000, such as aeroplanes.

Here, the reporting obligation is not based on suspicion, but on the transaction exceeding certain thresholds. The reporting obligation also covers credit institutions and financial institutions for transactions and services linked to the goods listed above. The provision establishes that several entities may have parallel reporting obligations in the same business relationship and transaction. The purpose of the regulation is to capture transactions that typically involve an elevated risk of money laundering, even in the absence of concrete suspicions.

Requirements for Internal Procedures and Governance

Articles 69–74 impose high requirements on how businesses design their internal procedures for identifying, assessing and reporting suspicious activities. The regulatory framework is extensive and is largely based on assessments in individual cases, which means that practical application is often complex.

At Morling Consulting, our AML lawyers support companies in translating regulatory requirements into concrete and functional processes. This includes developing reporting procedures, clarifying the allocation of responsibilities and ensuring that the organisation has the right conditions to act correctly and efficiently when suspicions arise.