The European Commission has published an Action Plan to strengthen the fight against the financing of terrorism.

The plan includes a proposal to bring virtual currency exchanges within the perimeter of the Anti-Money Laundering Directive, so that exchanges have to apply customer due diligence controls when they exchange virtual currencies for fiat money, ending what is widely (but sometimes wrongly) regarded as the anonymity associated with virtual currencies and their exchanges.

(Without any sense of irony), Vice-President Valdis Dombrovskis, said: “With today’s Action Plan we are moving swiftly to clamp down on terrorist financing, starting with legislative proposals in the coming months. We must … ensure that money laundering and terrorist financing is sanctioned in all Member States. We want to improve the oversight of the many financial means used by terrorists, from cash and cultural artefacts to virtual currencies and anonymous pre-paid cards, while avoiding unnecessary obstacles to the functioning of payments and financial markets for ordinary, law-abiding citizens.”

The Commission’s press release, Q&As and factsheet are available here, here and here. More to follow…