By Ella Rosenberg
The drone sector in the EU can be considered a diverse market. Apart from transferring goods, unloading docks, and surveillance, recently and especially in light of the Covid-19 Pandemic, drones are currently used to carry supplies to isolated communities, patients, and factories which produce emergency medical supplies.
With that said, the EU has not ceased to continue its regulatory vision and has continued to actively push towards regulating many aspects of the EU’s market, harnessing un-regulated activity and tackling illicit operations.
Part of these illicit operations is money laundering and counter terrorist financing. The EU has actively tried to drastically halt all money laundering and counter terrorist financing activity to a great extent, which has led to a new anti-money laundering Directive that will take force in December 2020.
The novelty in this Directive is that for the first time in the history of the EU, criminal liability and regulatory reporting are considered a personal liability on each legal and natural person operating in the EU or approaching European clients.
The drone market in the EU is directly affected by this Directive, not only in regards to liability, but also in regards to operational and commercial scope. Apart from the new regulatory framework by the EASA, the new Directive creates an additional regulatory framework which imposes further hindrance and difficulty entering the European market.
The Directive entails a few main aspects that have not been dealt with by the previous Directive- 5 AMLD. These aspects are pivotal for businesses that wish to continue working in the EU market, and should not be disregarded.
The first crucial point to consider is the fact that each operator in the EU will now have to bear personal criminal liability in case suspected or alleged money laundering or counter terrorist financing when conducting financial operations which are drone related. Furthermore, aiding or allegedly abetting will also be deemed personal criminal liability.
As for legal persons, such as companies and manufacturers, Member States will be able to impose sanctions. These sanctions may include blacklisting for EU grants, governmental tenders, disqualification for operators, judicial supervision, and permanent closure of companies.
Member State Financial Intelligence Units (hereinafter- FIUs) will have to inform each other on alleged un-regulatory activity, and inform the Agency dealing with the specific regulatory framework.
When applying the Directive to the drone industry in the EU, it is apparent that the FIUs will have to report to the European Union Aviation Safety Agency (hereinafter- EASA).
In addition, lack of conformity to 6 AMLD can cause permanent closure of drone companies and lack of option to apply to EU governmental tenders due to lack of compliance and working in an un-regulated manner.
It seems that when it comes to operating in the EU, regardless of the field, has become more troublesome. Yet, some industries which are in crucial need for social impact, such as the drone industry, will now need to comply not only with privacy and the EASA’s regulations, but also with the new anti-money laundering framework.
A new dawn is slowly but surely approaching the EU drone market. The only question remains, how and when will the drone operators comply?
Ella Rosenberg, an EU Law Regulatory Consultant, is CEO of the Israel-EU Chamber of Commerce and Industry.