On April 19, the European Parliament (EP) published a press release announcing its adoption of a proposal for a fifth Anti-Money Laundering Directive (MLD5). The introduction of MLD5 forms part of the European Commission’s action plan to counter terrorist financing and money laundering, published in February 2016 (further details are available in the Corporate & Financial Weekly Digest edition of February 12, 2016).
Notable changes under MLD5 include granting enhanced powers for direct access to information held in centralized bank account registries to designated EU Member States’ authorities and other relevant bodies, and increased transparency requirements in relation to:
- corporate and other legal entities—establishing “a clear rule of public access” to beneficial ownership information; and
- trusts—requiring firms that operate in the European Union to maintain beneficial ownership registers accessible to those who can demonstrate a legitimate interest.
Other changes MLD5 introduces are:
- prevention of risks associated with the use of virtual currencies for terrorist financing and limiting the use of pre-paid cards;
- improving the safeguards for financial transactions to and from high-risk third countries; and
- ensuring centralized national bank and payment account registers or central data retrieval systems in all Member States.
MLD5 will go into effect 20 days after its publication in the Official Journal of the European Union. EU Member States will then have 18 months to transpose MLD5 into national law.
The EP’s press release concerning MLD5 is available here.
Currently the adopted MLD5 text is still being processed for publication in English; however, the proposal—which includes an explanatory memorandum—is available in English here.
For further details of the existing EU fourth Money Laundering Directive and its implementation in the United Kingdom, see the Corporate & Financial Weekly Digest edition of June 30, 2017.