Despite last year’s scramble by EU member states to implement the Fourth Money Laundering Directive, EU bodies have already released plans for further changes to the EU’s anti-money laundering framework.
The revised directive (5MLD) aims to:
- ensure better safeguards for financial flows from high-risk third countries;
- enhance the powers and co-operation of EU Financial Intelligence Units (FIUs);
- establish centralised national bank and payment account registers or central data retrieval systems in all member states;
- tackle terrorist financing risks linked to virtual currencies;
- and minimise risks linked to anonymous pre-paid instruments (e.g., pre-paid cards).
The European Parliament and the Council reached a political agreement on the Commission’s proposal to strengthen the EU rules on anti-money laundering and counter-terrorist financing at the end of last year, but the finer details are still being hammered out, with firm proposals expected later this year.
“5MLD is part of the European Commission’s action plan to strengthen the fight against terrorist financing in light of the increased frequency of terrorist activity in Europe and the raised global threat level”, said Simmons & Simmons managing associate, Emily Agnoli.
New measures will include enhanced public access to beneficial ownership registers, to improve transparency in the ownership of companies and trusts. The registers will also be interconnected to promote co-operation between member states.
Anonymity for the online use of reloadable and non-reloadable prepaid cards will be suppressed, and the existing €250 threshold for anonymous prepaid cards will be reduced to €150 when used face-to-face.
Checks on risky third countries will be improved, with additional due-diligence measures being required for financial flows from these countries, and FIUs will have access to information in centralised bank and payment account registers, enabling them to identify account holders.