The text of the fifth Anti-Money Laundering Directive (5AMLD) has been published in the Official Journal of the EU. 5AMLD will amend the fourth Anti-Money Laundering Directive (4AMLD). It must be transposed by member states into national law by 10 January 2020.
Extend AML/CFT rules to virtual currency exchange service providers, tax related services, letting agents, art dealers and electronic wallet providers.
Clarify requirements and timing for the implementation of the registers of beneficial ownership.
Each member states must establish its register of beneficial ownership for corporates by 10 January 2020.
Each member states must establish its register of beneficial ownership for trusts by 10 March 2020.
The EU Commission (the Commission) must ensure the interconnection at EU level of the member state registers of beneficial ownership (in accordance with specifications to be issued by the Commission) by 10 March 2021.
Supplement requirements for ensuring the accuracy and reliability of the registers of beneficial ownership.
Require member states to implement mechanisms to ensure that information is adequate, accurate and current.
Member states must ensure that breaches of the obligations on corporates and trusts to maintain the register of beneficial ownership are subject to effective, proportionate and dissuasive sanctions.
Introduce an explicit obligation for beneficial owners of corporates to provide obliged entities with beneficial ownership information.
Require obliged entities to notify discrepancies between the beneficial ownership information on the registers and the beneficial ownership they hold. Discrepancies must be resolved and may be noted on the register.
Extend access to beneficial ownership information.
For the member state registers of beneficial ownership for corporates, access will be granted to competent authorities and Financial Intelligence Units (FIUs) (without any restriction), obliged entities (within the framework of customer due diligence), and 'any member of the general public'. The information which must be made available to the public may be limited to: the beneficial owner's month and year of birth, country of residence, nationality, and the nature and extent of the beneficial interest held. Competent authorities are (a) public authorities with designated responsibilities for combating money laundering or terrorist financing, (b) tax authorities, (c) supervisors of obliged entities and (d) authorities that have the function of investigating or prosecuting money laundering, associated predicate offences and terrorist financing, tracing and seizing or freezing and confiscating criminal assets.
For the member state registers of beneficial ownership for trusts, access will be granted to competent authorities and FIUs (without any restriction), obliged entities (within the framework of customer due diligence), any natural or legal person that can demonstrate a legitimate interest; and any person who files a written request in relation to a trust or similar which holds or owns a controlling interest in any corporate or other legal entity. The information which must be made accessible for these last two categories is limited to the beneficial owner's month and year of birth, country of residence, and nationality, as well as the nature and extent of the beneficial interest held.
The security exemption for access to beneficial ownership information by any member of the general public or obliged entities is narrowed. Member states may provide in national law for exemptions from the obligation to allow access to all or some beneficial ownership information (for trusts and corporates) in limited circumstances. These limited circumstances include where there is a "disproportionate" risk of fraud, kidnapping, blackmail, harassment, violence or intimidation or where the beneficial owner is a minor or otherwise incapable. Exemption decisions must be based on a detailed evaluation, subject to administrative review and effective judicial remedy. Member states that grant exemptions must publish annual statistical data and report the data to the Commission. Such exemptions will not apply to competent authorities, FIUs, credit institutions, financial institutions or obliged entities that are public officials.
Member states may make the information held in their national registers of beneficial ownership (for trusts and corporates) available on the condition of online registration and the payment of a fee (which shall not exceed the administrative costs of making the information available, including costs of maintenance and developments of the register).
Provide for centralised national bank and payment account registers or central data retrieval systems in all member states by 10 September 2020.
Further limit the anonymous use of electronic money products.
Harmonise and expand the minimum enhanced due diligence measures and controls on the financial transactions from and to high risk third countries (as identified in the EU Commission list).
Require that European “politically exposed persons” be subject to same due diligence as those from outside of EU.
Provide protection for whistle blowers.
Enhance the powers of EU FIUs.
Enhance the access of EU FIUs to information (including the new centralised bank account registers).
We continue to monitor the passage of the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Bill 2018 through the legislative process. It is scheduled for Committee stage this week.
We await further updates from the Companies Registration Office in respect of:
the timelines for the launch of the central beneficial ownership register for companies and industrial and provident societies, and
the time frame for companies and industrial and provident societies to make relevant beneficial ownership filings on the central register.