The European Commission (EC) has proposed amendments to the Fourth Anti-Money Laundering Directive (4th AMLD) to further strengthen EU rules on anti-money laundering, to counter terrorist financing and increase transparency about who really owns companies and trusts.
The 4th AMLD is designed to reinforce the supranational approach in the fight against money laundering and terrorist financing. The Directive brings the EU’s framework into alignment with the Financial Action Task Force’s international anti-money laundering and counter-terrorist financing recommendations.
The 4th AMLD will repeal and replace the Third Money Laundering Directive (2005/60/EC) and the Third Money Laundering implementing Directive (2006/70/EC). The 4th AMLD will apply as of the 26th of June 2017.
The following are some of the proposals for the 5th Anti-Money Laundering Directive.
- Extending the powers of the Financial Intelligence Units in the EU Member States and facilitate their cooperation. They will be able to access information through centralised registers or electronic data retrieval systems.
- Bringing virtual currency exchange platforms and custodian wallet providers within the scope of the Anti-Money Laundering Directive. Such entities would be required to apply customer due diligence measures when exchanging virtual currencies for real currencies, making it harder to fund criminal activities.
- Reinforcing transparency measures applicable to pre-paid payment instruments, by lowering thresholds for identification from €250 to €150 and extending customer verification requirements to minimise the anonymous use of these products.
- Applying stronger and additional due diligence measures on financial flows from third countries to manage and mitigate cases of high risk and cases where natural persons or legal entities are established in high-risk jurisdictions.
- Enabling the public to have access to certain information on the ultimate beneficial owners of companies and business-related trusts upon showing a legitimate interest.
- Clarifications and strengthening of the beneficial ownership transparency rules for companies and trusts ensuring improved access to beneficial ownership registers instilling further confidence in financial markets and investors.
The proposed amendments still need to be approved by the European Parliament and the Member States before they come into law.