On 19 April 2018, the European Parliament announced that it voted to adopt the proposed Fifth Money Laundering Directive (5AMLD). The European Parliament published a provisional text of 5AMLD. The Parliament requires the European Commission to revert to Parliament if it replaces, substantially amends or intends to substantially amend the proposal. The next step is for 5AMLD to be formally adopted by the Council. It will enter into force 20 days after it has been published in the Official Journal of the EU. According to the provisional text, Member States must transpose the provisions of 5AMLD into national law 18 months after the entry into force date.
On 25 April 2018, the Council of the EU published an information note (including the draft text) following the European Parliament's first reading of 5AMLD.
Some notable features of 5AMLD are set out below.
- EU FIUs (police financial intelligence units) will be given new powers to request ML/ TF financing information from firms and will be given direct access to beneficial ownership information held by firms. Co-operation and information- sharing between EU FIUs will also be improved.
- Providers of exchange services between virtual currencies and fiat currencies will be brought into scope, together with custodian wallet providers.
- Enhanced due diligence requirements for financial transactions to and from high-risk third countries will be refined.
- Member States will be required to introduce centralised national bank and payment account registers or central data retrieval systems and these will be directly accessible by EU FIUs.
- Firms, when entering into a new business relationship with a corporate (or other legal entity), which holds a register of beneficial ownership will be required to obtain proof of registration or an excerpt of the register.
- Firms will be obliged to report discrepancies they find between the beneficial ownership information available in the central registers and the beneficial ownership information available to them. In the case of reported discrepancies, Member States will be obliged to ensure that appropriate actions be taken to resolve the discrepancies in a timely manner and, if appropriate, a specific mention may be included in the central register in the meantime
- Beneficial Owners of corporate or other legal entities will be obliged provide those entities with all the information necessary to comply with the requirements (to maintain a register of beneficial ownership).
- Helpfully, in the context of PEPs, each Member State will be obliged to publish a list of prominent public functions. The Commission will be obliged to publish a list of EU prominent public functions. The Commission will be obliged to publish a combined list of the Member State and EU lists of prominent public functions
- Member States may choose to make the information held in their national central register of beneficial ownership available on the condition of online registration and the payment of a small fee. The accessing of such information would then be traceable.