The European commission (EC) has on the 5th July 2016 issued new proposals to amend the current framework in its fight against organized crime, corruption and tax evasion. These proposals will amend EU Directive 2015/849 on preventing the use of the financial system for money laundering or terrorist financing also known as the 4th Anti-Money Laundering Directive.
Measure 1 – Designate virtual currency exchange platforms (and wallet provider) as obliged entities
This way, competent authorities will be able to better monitor currency transfers since virtual currency exchange platforms and wallet providers will become obliged entities and therefore become subject to the obligation to implement preventive measures and report suspicious transactions.
Measure 2 – Tackle the use of anonymous pre-paid instruments
The EC is proposing to (i) lower the thresholds from Eur250 to Eur150 for non-reloadable prepaid payment instruments to which Customer Due Diligence (CDD) measures apply and to (ii) suppress the CDD exemption for online use of prepaid cards. This will better serve identification purposes and widen customer verification requirements.
Measure 3 – Give new powers to Financial Intelligence Units (FIUs) to request information from any obliged entity
The EC is proposing to reinforce the provisions found in the 4th AMLD to facilitate the cooperation between FIUs to identify the financial operations of terrorist networks across borders and in detecting their financial backers
Measure 4 – Enable FIUs to identify holders of bank and payment accounts
The EC is proposing to require Member States (MS) to set up automated centralized mechanisms to swiftly identify holders of bank and payment accounts. This can take the form of a central registry, containing the necessary details, which will grant their own FIUs a full and swift access to the information.
Measure 5 – Harmonize the EU approach towards high risk third countries
Each MS is currently adopting a specific list of Enhanced Customer Due Diligence (ECDD) Measures towards high risk countries. The EC is proposing the harmonization of these measures which will avoid the risk if forum shopping.
Measure 6 – Improve transparency: new rules on access to beneficial ownership (BO) information
The EC is proposing public access to BO information for companies and for trusts engaged in commercial or business-like activities and access to such information on a legitimate interest basis for family and charitable trusts.
Measure 7 – Interconnection of national central registers
The interconnection will allow competent authorities, FIUs and obliged entities to identify who the BOs are in an easy and efficient way, therefore increasing the transparency requirements on companies and trusts and will allow the public to access the BO information across the EU.
Measure 8 – Additional technical clarifications
A number of clarifications are being proposed such as the types of entities monitored, the concept of ‘competent authority’ and accurate references to electronic identification means.
Measure 9 –Earlier transposition
The EC is calling MS to bring transposition of the entire anti-money laundering framework into national law forward to 1 January 2017.