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Targeted Financial Sanctions and the Evolving European Union AML/CFT Framework: What’s Changing and Why It Matters

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  • Pavlidis, Georgios

Abstract

This paper aims to examine two recent legislative initiatives of the European Union (EU)-the 6th AML Directive and the new AML Regulation, focusing particularly on the provisions that reform targeted financial sanctions as part of the EU's anti-money laundering and countering the financing of terrorism (AML/CFT) framework. The paper explores why the reform was considered necessary, highlights the key objectives and rules governing targeted financial sanctions in the context AML/CFT, and discusses the challenges, as well as the opportunities that arise. The article argues that the integration of TFS into AMLD6 and AMLR represents more than a technical adjustment. It transforms sanctions from primarily foreign-policy tools into core preventive obligations embedded in the compliance frameworks of public authorities and private actors. This reorientation, however, raises challenges of consistency, resource allocation, and rights protection that will ultimately determine the effectiveness of the EU's new sanctions architecture.

Suggested Citation

  • Pavlidis, Georgios, 2025. "Targeted Financial Sanctions and the Evolving European Union AML/CFT Framework: What’s Changing and Why It Matters," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 9(2), pages 193-210.
    • Handle: RePEc:zbw:espost:338623
    DOI: 10.46282/blr.2025.9.2.1055
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    File URL: https://www.econstor.eu/bitstream/10419/338623/1/Article53.pdf
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    References listed on IDEAS

    as
    1. Paolo Costanzo, 2013. "The risk-based approach to anti-money laundering and counter-terrorist financing in international and EU standards: what it is, what it entails," Chapters, in: Brigitte Unger & Daan van der Linde (ed.), Research Handbook on Money Laundering, chapter 26, pages 349-367, Edward Elgar Publishing.
    2. Georgios Pavlidis, 2023. "Deploying artificial intelligence for anti-money laundering and asset recovery: the dawn of a new era," Journal of Money Laundering Control, Emerald Group Publishing Limited, vol. 26(7), pages 155-166, May.
    3. Ian John Stewart & Andrea Viski & Jonathan Brewer, 2020. "Combating the financing of proliferation: challenges and new tools," Journal of Financial Crime, Emerald Group Publishing Limited, vol. 27(4), pages 1107-1121, March.
    4. Marcus Killick & David Parody, 2007. "Implementing AML/CFT measures that address the risks and not tick boxes," Journal of Financial Regulation and Compliance, Emerald Group Publishing Limited, vol. 15(2), pages 210-216, May.
    5. Marcus Killick & David Parody, 2007. "Implementing AML/CFT measures that address the risks and not tick boxes," Journal of Financial Regulation and Compliance, Emerald Group Publishing Limited, vol. 15(2), pages 210-216, May.
    6. Paul B Stephan, 2022. "Seizing Russian assets," Capital Markets Law Journal, Oxford University Press, vol. 17(3), pages 276-287.
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