On May 14, 2018, the Council of the European Union adopted the EU's Fifth Money Laundering Directive, following the agreement reached between the European Parliament and the Council in December 2017. 5MLD will amend the existing EU Money Laundering Directive. The key changes are:
- Extending 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.
- Harmonizing the application of enhanced customer due diligence for third countries that are determined by the European Commission to be high risk countries. Member States will be able to apply additional measures, where appropriate.
- Reducing the thresholds under which obliged entities are exempt from applying certain CDD measures to prepaid cards. The customer
- 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.
- Enhancing the powers of and cooperation between Financial Intelligence Units, 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.
- Requiring Member States to maintain lists of specific functions that qualify as prominent public functions to assist in the identification of politically exposed persons.
- Enhancing access to information on beneficial ownership across the EU and improving transparency in the ownership of companies and trusts.
5MLD will enter into force 20 days after it has been published in the Official Journal of the European Union. Member States must transpose it into their national laws within 18 months of the date it enters into force.
The announcement is available at: http://www.consilium.europa.eu/en/press/press-releases/2018/05/14/money-laundering-and-terrorist-financing-new-rules-adopted/pdf and the agreed text of 5MLD is available at: http://data.consilium.europa.eu/doc/document/PE-72-2017-INIT/en/pdf.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
