Upcoming changes to the Fourth Anti Money Laundering Directive – UPDATE
Published on 16-05-2018
On 14 May 2018, the European Council supported proposals for amendment of the 4th Anti Money Laundering Directive (see link to press release and adopted text, also known as the 5th Anti Money Laundering Directive (AMLD5)). AMLD 5 aims to enhance transparency in order to fight against terrorist financing, tax evasion and money laundering.
AMLD5, inter alia, includes:
- A set of CDD rules, including customer verification requirements for virtual currency exchange platforms and custodian wallet providers. These platforms and providers will also have to be registered, as will currency exchanges and cheque cashing offices, and trust or company services providers (in the Netherlands, trust offices are in principle already required to obtain a licence).
- A reduction in the threshold for CDD requirements with respect to prepaid e-money cards from EUR 250 to EUR 150.
- The possibility for the European Commission to adopt delegated acts in order to identify high-risk third countries, taking into account new strategic deficiencies under AMLD5. A third country, for example, needs to have effective, proportionate and dissuasive sanctions in order to combat money laundering and terrorist financing.
- An extension of the Directive as a consequence of which tax advisory services, real estate agents, art dealers will under certain conditions fall inside the scope of the Directive.
- Measures that will increase the information available on financial transactions, on corporate and other legal entities, as well as trusts and legal arrangements having a structure or functions similar to trusts. Under AMLD5 it would, for example, be possible for any natural or legal person that can demonstrate a legitimate interest to access information on the beneficial ownership (UBO) of a trust or a similar legal arrangement.
The revised rules will enter into force on the twentieth day following publication in the Official Journal of the EU. The Member States will then have eighteen months to implement the new rules into national law. The implementation of AMLD5 by the Member States is excepted to be finalised by the end of 2019.