The European Parliament voted, on 20 May 2015, to adopt the Fourth Anti-Money Laundering Directive and Regulation (AML IV), which implements the recommendations of the Financial Action Task Force (FATF) and, in some areas, expands on the FATF’s requirements and provides for additional safeguards.
AML IV will for the first time oblige EU member states to keep central registers of information on the ultimate “beneficial” owners of corporate and other legal entities, as well as trusts. These central registers were not envisaged in the European Commission’s initial proposal, but were included by MEPs in negotiations. The text also sets out specific reporting obligations for banks, auditors, lawyers, real estate agents and casinos, among others, on suspicious transactions made by their clients.
The central registers will be accessible to the authorities and their financial intelligence units (without any restriction), to “obliged entities” (such as banks doing their “customer due diligence” duties) and also to the public (although public access may be subject to online registration of the person requesting it and to a fee to cover administrative costs).
To access a register, a person or organisation – for example investigative journalists or NGOs –will have to demonstrate a “legitimate interest” in suspected money laundering, terrorist financing and in “predicate” offences that may help to finance them, such as corruption, tax crimes and fraud.
These persons could access information such as the beneficial owner’s name, month and year of birth, nationality, country of residence and details of ownership. Any exemption to the access provided by member states will be possible only “on a case-by-case basis, in exceptional circumstances”.
The central register information on trusts will be accessible only to the authorities and “obliged entities”.
AML IV clarifies the rules on “politically-exposed” persons” – those people at a higher than usual risk of corruption due to their political position, such as heads of state, members of government, supreme court judges and members of parliament, as well as their family members. Where there are high-risk business relationships involving such persons, additional measures should be taken to establish the source of wealth and source of funds involved.
Having been formally endorsed by the European Council in February, this was the last stage of the Directive’s progress through EU institutions. It has now beeen published in the Official Journal of the European Union and will come into force on 26 June 2015; and must be transposed into the national laws of the Member States by 26 June 2017. All relevant firms will be required to comply with these national laws from 26 June 2017.