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Won and Lost: Details of the Compromise on the European Anti-Money Laundering Directive


Following the agreement of the European Parliament, the European Commission and the Council of Member States on the revision of the European Anti-Money Laundering Directive, please find below the details of the final compromise.

 

Time table for the transposition of the 5th Anti-Money Laundering Directive

  • Publication in the Official Journal of the EU: expected mid-2018
  • Entry into force of the amended Directive: end 2019 (18 months after publication)
  • Opening of the national registers of business owners to the public at the end of 2019 (18 months after publication)
  • Opening of the national registers of trust owners to persons with a legitimate interest: early 2020 (20 months after publication)
  • Establishment of national bank account registers: mid-2020 (26 months after publication)
  • Interconnection of national registers: early 2021 (32 months after publication)

 

Won

Proposals from the Commission and Parliament, which are part of the compromise with the Council, including many green proposals:

  • Public access to national registers of beneficial owners of companies operating in the EU, including subsequent interconnection of national registers
  • Access to national registers of beneficial owners of trusts operating in the EU, where there is a legitimate interest (e. g. in the case of NGOs and investigative journalists) including subsequent interconnection of national registers
  • If the actual beneficial owner of a company cannot be identified and only the managing director is known, this must be indicated in the beneficial ownership register.
  • Establishment of national registers for bank accounts and safe deposit boxes, including subsequent interconnection of national registers
  • Public authorities must have access to information on real estate ownership and the Commission assesses by the end of 2020 whether national information systems (central registers or data retrieval systems) should be linked.
  • Tougher criteria for assessing third countries with an increased risk of money laundering (availability of information on beneficial owners, possibility of sanctions against violations of money laundering rules and obligation to report suspicious transactions)
  • Extending the scope of the Anti-Money Laundering Directive to cover all forms of tax advisory services, letting agents, freeports, art dealers, electronic wallet providers and virtual currency exchange service providers
  • Self-regulating professions must report on suspicious transaction reports received, suspicious transaction reports forwarded to the Financial Intelligence Unit (FIU), violations of the Anti-Money Laundering Directive and sanctions imposed
  • Facilitated cooperation between national FIUs and inclusion of bank supervisors in the exchange of information
  • Protection of whistleblowers who report money laundering from discrimination in the workplace and protection of their identity
  • Extension of reporting obligations of national FIUs (information on the exchange of information with authorities with other countries, number of on-site visits, identified violations of the law and sanctions imposed)
  • Commission report on Member States‘ action on complaints concerning non-compliance with Anti-money laundering rules
  • Commission report on the need to enhance its control of the implementation of the Anti-money laundering Directive in the Member States
  • Commission report on the cooperation between Member States and possible improvements in cooperation
  • Commission report on the necessity of and possibility for collecting information in the EU on beneficial owners of companies and trusts located in third countries
  • Publication of the Commission’s supranational risk assessment reports and of a summary of the Member States‘ national risk assessment reports
  • Third-country nationals seeking citizenship of an EU Member State for a fee must be identified in accordance with the Anti-Money Laundering Directive.
  • Reduced threshold for obligatory customer identification for electronic prepaid cards
  • Preservation of equal treatment of European politically exposed persons (PEPs) with PEPs from third countries in the application of enhanced customer due diligence obligations (including verification of source of funds and continuous monitoring). The German wish for special treatment of national PEPs will only be considered for the next revision of the Directive.

 

Lost

Parliament’s proposals, which failed because of opposition from the Member States:

  • Open access to information about the beneficial owners of trusts without having to prove a legitimate interest
  • Registration of companies and trusts located in third countries
  • Termination of business relationship with companies where the real owners are not known, but only the directors („straw men“).
  • Regular on-site inspections of Member States by the Commission
  • Independent oversight of self-regulating professions such as lawyers and auditors (instead of „appropriate and objective oversight“)
  • Sanctions even in the case of simple infringements of the law, and not only in the case of serious and repeated violations
  • Collection of beneficial ownership information of life insurance contracts and financial instruments
  • Establishment of a European Financial Intelligence Unit (“EU FIU”)
  • Follow-up to the Commission’s recommendations from the supranational assessment of money laundering risks in the Member States
  • Tax offences should be considered a predicate offence to money laundering, irrespective of the sanctions imposed in the Member State concerned