On Tuesday 5 February the European Commission adopted two proposals to reinforce the EU's existing rules on anti-money laundering and fund transfers. One is a proposal for Directive revising and repealing Directive 2005/60/EC, the Third Anti-Money Laundering Directive, which is aimed at preventing the financial system from being used for money laundering and terrorist financing. The other is a modified version of Regulation No 1781/2006 on information accompanying transfers of funds.
European legislation requires financial establishments and other entities such as accountants and legal professionals to take certain measures to help fight money laundering. In particular, they must carry out customer due diligence when clients enter into business relations or conclude transactions which exceed certain fixed amounts. This includes identifying clients and assessing (or at least obtaining information on) the intended business relationship. Other requirements include maintaining records, having internal controls and filing reports on suspicious transactions.
The new texts take into account the latest recommendations of the Financial Action Task Force (FATF), the world organisation leading the fight against money laundering.
In particular, the proposals provide a clear mechanism for the identification of beneficial owners. Companies will be required to conserve information on those who stand behind the company in reality. The Commission also proposes expanding the scope of the Directive to cover natural or legal persons providing services or dealing in goods (such as car dealerships) for cash payments of EUR 7,500 or more. This amount is half the current threshold of EUR 15,000. There are specific provisions for politically exposed persons, which now cover those from within the EU, not just non-member states. There are also specific measures covering national Financial Intelligence Units (FIUs), whose tasks are to receive, analyse and disseminate reports about suspicions of money laundering or terrorist financing to the competent authorities.
The proposal for a Directive is available at: http://ec.europa.eu/internal_market/company/docs/financial-crime/130205_proposal-directive-money-laundering_en.pdf.
The proposal for a Regulation is available at: http://ec.europa.eu/internal_market/payments/docs/transfers/130205_proposal-regulation-information-transfer_en.pdf.