On 7 April 2016 the European Commission published an inception impact assessment regarding its proposal for a directive to amend the Fourth Money Laundering Directive (MLD4). The amendments are proposed in response to recent terrorist attacks, which identified a number of deficiencies in the EU’s regime for tackling the finance of terror. It is envisaged that the relevant issues will be tackled by extending or building on the already existing implementation plan to ensure that MLD4 is transposed into national legislation no later than 26 June 2017.
The objectives of the amending directive concern issues that were already envisaged or discussed during EU negotiations on MLD4, namely:
- harmonised enhanced due diligence measures and counter measures with regard to high-risk third countries;
- imposing AML/CFT obligations on virtual currency exchange platforms;
- further reducing the exemption regime for anonymous prepaid cards under MLD4;
- clarifying the powers of and cooperation between Financial Investigation Units (FIUs) by ensuring that EU law is aligned with the latest international standards on AML/CFT in this field;
- providing FIUs with an efficient mechanism to get timely access to information on the identity of holders of bank and payment accounts.
A targeted data collection is currently being carried out in relation to virtual currencies, how national authorities collect data to detect and assess suspected terrorist activities, cost benefit analysis of national bank and payment accounts registers, the size of the prepaid voucher market, the extent to which virtual currencies and prepaid vouchers are vulnerable to being used in terrorist financing, monitoring mechanisms to ensure traceability of prepaid instruments, and the kinds of due diligence actually carried out in relation to transactions involving high-risk third countries. This process will take some time and will inform the eventual legislative proposals.
The Commission launched two surveys in December 2015 to gather this information. The first seeks the views of FIUs and public authorities on the agreed problem areas relating to terrorist financing, and the second seeks views from affected stakeholders on the challenges regarding terrorist financing and potential solutions. This method has been preferred to a comprehensive public consultation due to prevailing “political urgencies” and the fact that the proposed amendments are sufficiently targeted