On 19 June 2018, the Fifth Money Laundering Directive (5MLD) was published in the Official Journal of the European Union. 5MLD makes a number of changes to the European Anti-Money Laundering and Counter-Terrorist Financing regime set out in the Fourth Money Laundering Directive. The key changes are as follows:
- extends the scope of "obliged entities" to include providers of exchange services between virtual and fiat currencies as well as custodian wallet providers. These entities will need to register in their home Member State;
- harmonises the application of enhanced customer due diligence (CDD) for third countries that are determined by the EC to be high risk countries. Member States will be able to apply additional measures, where appropriate;
- reduces the thresholds under which obliged entities are exempt from applying certain CDD measures to prepaid cards. Customers in a remote payment transaction exceeding EUR 50 will need to be identified. In addition, the use of anonymous prepaid cards issued outside the EU will only be permitted where the cards comply with requirements equivalent to EU laws;
- enhances the powers of and cooperation between Financial Intelligence Units (national centres that collect information on suspicious or unusual financial activity), including giving them access to information and the ability to exchange it without impediments. This will include access to information on all types of virtual currencies, not only those that are serviced by providers of exchange services and custodian wallet providers;
- requires Member States to maintain lists of specific functions that qualify as prominent public functions to assist in the identification of politically exposed persons; and
- enhances access to information on beneficial ownership across the EU and improving transparency in the ownership of companies and trusts.
5MLD will come into force on 20 July 2018. Member States are required to transpose 5MLD into their national laws within 18 months of that date, which is 10 January 2020.
The directive is available here:
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