Directive 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, known as the Fourth Anti-Money Laundering Directive (the “Directive“), is to be revised, as agreed on 15 December 2017 between the European Parliament and the Council of the EU.
The revisions to the Directive are a major step towards higher transparency in the anti-money laundering (“AML“) framework.
An overview of some of the changes the revision of the Directive will bring about are the following:
Beneficial ownership of companies and trusts
- The beneficial ownership registers for companies, will be public. The measure is aimed at preventing the misuse of legal entities for money laundering and terrorist financing purposes through the anonymity afforded by beneficial ownership of such entities
- Banks, lawyers, financial intelligence unities, competent authorities and persons with demonstrated legitimate interest will have access to data on the beneficial ownership information relating to trusts
- National beneficial ownership registers will be interconnected for the purposes of cooperation between EU member states
- Persons holding, storing and transferring virtual currencies will be subject to AML rules
- Virtual currency exchange platforms and custodian wallet providers are caught under the new rules
High risk third countries
- Member States will have to ensure that the sectors dealing with countries presenting strategic deficiencies in their AML regimes listed by the European Commission apply systematic enhanced controls on the financial transactions from and to these countries
Centralised bank account registers and enhanced cooperation
- Member States will be required to set up centralised bank account registers or retrieval systems to identify holders of bank and payment accounts
- The exchange of information and cooperation between financial supervisory authorities will be enhanced, including with the European Central Bank
- From the perspective of protecting the personal data and privacy rights of beneficial owners, the proposed revision of the Directive sets out an approach under which a set of data to be made available to the public should be limited, clearly and exhaustively defined, and should be of a general nature, so as to minimize the potential prejudice to the beneficial owners
- In order to limit the interference with the right to respect for their private life and protect their personal data, the proposed revision suggests that available information should relate essentially to the status of beneficial owners of businesses and trusts, and should strictly concern the sphere of economic activity in which the beneficial owners operate.
The political agreement on the revision of the Directive will need to be formally endorsed by the European Parliament and the Council. Member States will then have up to 18 months to transpose the new rules in their national legislation.
Contact us to discuss your requirements on any legal issue regarding the new state of play in the EU.