RegRally Insights: Your Guide to AML/CTF Compliance, March 2026

Welcome to our monthly newsletter on Anti-Money Laundering and Counter-Terrorist Financing. It is dedicated to everyone who wants to understand the latest trends and developments, get tips from our experts and deepen their knowledge.

AMLA Consults on New EU-Wide AML/CTF Standards Through Draft RTS

AMLA has launched public consultations on three draft regulatory technical standards aimed at harmonising AML/CTF rules across both financial and non-financial sectors and ensuring consistent supervision across the EU.

The draft RTS cover key areas: criteria for determining when customer due diligence obligations apply (including business relationships and linked transactions), detailed requirements for conducting customer due diligence on a risk-based basis, and a harmonised framework for supervisory and administrative measures, including penalties for AML/CTF breaches.

A public hearing on the first two RTS is scheduled for 24 March 2026, with consultation submissions accepted in all EU languages.

Financial institutions should assess the proposed standards and consider participating in the consultation, with particular focus on the new CDD framework and harmonised enforcement approach, as these will directly impact internal AML/CTF policies, procedures and supervisory expectations.

MONEYVAL Reviews Latvia’s AML/CTF Framework

The Council of Europe’s anti-money laundering and counter-terrorist financing monitoring body, MONEYVAL, has published a report assessing the effectiveness of Latvia’s measures against money laundering, countering terrorist financing and proliferation financing and their level of compliance with the Financial Action Task Force Recommendations, at the time of the on-site visit conducted in November 2024.

Key findings: Latvia demonstrates strong overall performance, well-developed risk understanding and sustained political commitment.

Strengths:

1. solid international cooperation;
2. high-quality FIU analytical outputs;
3. effective risk-based banking supervision;
4. robust beneficial ownership transparency framework;
5. strong asset recovery practices, including non-conviction-based confiscation.

Areas for improvement:

1. risk assessment methodology in the non-financial sector (State Revenue Service);
2. A fully risk-based supervisory approach by the Latvian Council of Sworn Advocates;
3. prosecution of legal persons not yet commensurate with risk profile;
4. uneven TF awareness in certain non-financial sectors, particularly the legal profession.

Latvia is placed under regular follow-up and must report to MONEYVAL by June 2028.

MONEYVAL Report, Use of virtual assets for money laundering, terrorist financing and sanctions evasion

MONEYVAL published an updated horizontal review of virtual asset (VA) and virtual asset service provider (VASP) regulation across 25 jurisdictions.

Key findings: significant progress in regulatory/supervisory frameworks and international cooperation.

However, challenges remain:

1. Enforcement against unlicensed VASPs is weak.
2. FATF Travel Rule (Recommendation 16) operationalised in only 46% of jurisdictions;
3. Sanctions evasion via virtual assets is a growing concern.

Emerging risks identified: misuse of VAs for sanctions evasion, fraud, proliferation financing and child exploitation.

Further action needed on:

1. Integrating sanctions/proliferation financing risks into national assessments;
2. improving suspicious activity reporting quality by VASPs;
3. enhancing investigatory capabilities;
4. cross-border cooperation and capacity building.

VASPs and financial institutions dealing with virtual assets should:

1. Ensure full licensing/registration compliance.
2. Implement the FATF Travel Rule if not yet operationalised;
3. Integrate sanctions evasion and proliferation financing risks into their AML/CTF risk assessments;
4. Review and improve the quality of suspicious activity reports.

Institutions should monitor further MONEYVAL guidance given the rapidly evolving VA sector.