In response to recent terrorist events in Europe, further amendments are being proposed to anti-money laundering legislation (5MLD). Its aim is to close down the financial means of criminals without preventing the functioning of payment systems and markets.
The draft directive has two main objectives:
- Preventing the financial system being used for the funding of criminal activities; and
- Strengthening transparency rules to prevent large-scale concealment of funds.
The changes amend the Fourth Money Laundering Directive (4MLD), which came into effect on 26 June 2017.
What are the proposed changes?
- Tackling risks linked to anonymous pre-paid instruments (e.g. pre-paid cards): the threshold for identifying the holders of prepaid cards to reduce from €250 to €150 and customer verification requirements will be extended
- Tackling terrorist finance risks relating to virtual currencies: virtual currency exchange platforms and custodian wallet providers to apply customer due diligence controls
- Stronger checks on risky third countries: improved checks on risky third countries with additional due diligence measures by banks on financial flows from these countries. The Commission has created and maintains a harmonised list of non-EU countries with deficiencies in their anti-money laundering prevent schemes
- Full public access to the beneficial ownership registers: enhanced access to beneficial ownership registers to improve transparency about the ownership of companies and trusts. The registers will also be interconnected to facilitate cooperation between member states
- Enhancing the powers of EU Financial Intelligence Units and facilitating their cooperation: FIUs to have access to information in centralised bank and payment account registers enabling them to identify account holders