29 Aug The AML 5th Directive and Expected Amendments

On 26 April 2018, the European Parliament confirmed the latest text of the proposed Directive, which will be known as the 5th AML Directive. This new Directive is designed to strengthen the compliance of the 4th AML Directive, in view of the recent terrorist attacks in Europe and the increase in virtual financing.

Modern financial activities are becoming popular; The new EU rules and legislation will be including them in their scope

Certain modern financial activities are becoming more popular and have remained so far outside the scope of the EU rules and legislation. The proposed changes are extending the preventing framework to these latest services too.

The changes that will be included in the 5^th AML Directive are expected to be the following:

• Benefit Ownership Registers
• Virtual Currencies
• Prepaid Cards
• Broader Information Sharing
• Enhanced Due Diligence

Key Highlights

1. The 5th AML Directive proposes that EU citizens are granted access to Benefit Owner Registers without having to demonstrate “legitimate interest”, therefore, improving transparency about the ownership of companies and trusts.
2. The 5th AML Directive brings virtual currency platforms and wallet providers into the scope of the AML legislation, responding to the huge growth in the use of virtual currencies and Fintech in general.
3. The 5th AML Directive proposes that the anonymous transaction limit on prepaid cards is reduced to €50. Transactions of higher value will require full identification of the card holder.
4. The 5th AML Directive suggests that Member States shall create an automated and centralised system or a central register, giving full unrestricted and efficient access to any information which could assist Financial Intelligence Units (FIUs).
5. The 5th AML Directive proposes an improvement on checks for high-risk third world countries, which many not have adequate AML strategies in place. Therefore, in such cases, firms need to apply enhanced due diligence measures.

A detailed approach to the proposed legislation amendments that will be known as the 5^th AML Directive are addressed in the classroom-based and online AML trainings delivered by the European Institute of Management and Finance (EIMF). Should you wish to participate, please click here to view the Training Calendar of the Classroom-led Programmes, or click here to view the Training List of eLearning Courses. For more information, you can contact EIMF at +357-2227440 or [email protected].