5th Anti-Money Laundering Directive comes into force
The EU’s 5th Anti-Money Laundering Directive (5AMLD) was adopted on 9 July 2018. Today, the 10th January 2020, the Directive comes into force. By this date, all EU member states are required to implement these new rules into their national legislation.
What will the 5th Anti-Money Laundering Directive will bring?
• Increased transparency about who really owns companies and trusts to prevent money laundering and terrorist financing via opaque structures. The beneficial ownership registers for legal entities, such as companies, will be public. The access to data on the beneficial owner of trusts will be accessible without any restrictions to competent authorities, Financial Intelligence Units, the professional sectors subject to Anti-Money laundering rules (banks, lawyers…) and will be accessible to other persons who can demonstrate a legitimate interest.
• Interconnection of the beneficial ownership registers at EU level. The national registers on beneficial ownership information will be interconnected directly to facilitate cooperation and exchange of information between Member States.
• Lifting the anonymity on electronic money products (prepaid cards) in particular when used online Member States will have the possibility to allow the anonymous use of electronic money products only in two situations:
(i) when customers use their prepaid instrument (such as prepaid cards) directly in the shop for a maximum transaction amount of EUR 150;
(ii) when customers carry out an online transaction with a prepaid card below EUR 50.
• Extending Anti-Money Laundering and Counter Terrorism financing rules to virtual currencies, tax related services, and traders in works of art. The rules will now apply to entities which provide services that are in charge of holding, storing and transferring virtual currencies, to persons who provide similar kinds of services to those provided by auditors, external accountants and tax advisors.
• Broaden the criteria for assessing high-risk third counties and ensure a common high level of safeguards for financial flows from such countries. The list of checks is now harmonised to ensure there are no loopholes in the EU. In addition, the listing of the Commission will include third-countries with low transparency on beneficial ownership information, no appropriate and dissuasive sanctions or which do not cooperate nor exchange information.
• Setting up centralised bank account registers or retrieval systems Member States will be required to set up centralised bank account registers or retrieval systems to identify holders of bank and payment accounts.
• Enhancing the powers of EU Financial Intelligence Units and facilitating their cooperation The Financial Intelligence Units will have access to more information through centralised bank and payment account registers or data retrieval systems. The Financial Intelligence Units from the different EU countries will also be able to cooperate more easily, as well as with other competent authorities.
• Enhancing cooperation between financial supervisory authorities The revised Directive will further enhance the exchange of information and cooperation money laundering supervisors and financial super visor y authorities including with the European Central Bank. The European Commission already has set up a joint working group to support such closer cooperation and exchange of information, given that risks of money laundering can also pose a risk to the financial stability of a bank.