The European Parliament recently adopted, with changes, the European Commission's proposal for a directive to amend the Fourth Money Laundering Directive (Fourth MLD), previously summarised here. The changes include:
- Deletion of the proposed change to the definition of beneficial owner, which required beneficial owners who had a 10% ownership in certain companies that were at risk of being used for money laundering and tax evasion to be included in the registers. Article 65 provides that the Commission shall, if appropriate, issue a report to assess the need to lower the percentage for identification of beneficial ownership of legal entities.
- Adding requirements in Article 30(1) of the Fourth MLD (beneficial ownership information) that Member States shall ensure that breaches of Article 30 are subject to effective, proportionate and dissuasive measures or sanctions, and that beneficial owners of corporate or other legal entities provide those entities with the information necessary for the entity to comply with the requirement to hold adequate, accurate and current information on their beneficial ownership.
- Clarifying (at Article 30(1)) that information on beneficial ownership should be accessible to any member of the general public (wider than the Fourth MLD, under which persons had to demonstrate a legitimate interest). The exceptional circumstances where Member States may provide for an exemption to access by certain categories of persons have also been amended (Article 30(9)).
- The information must remain publicly available through the national central registers and the system of interconnection of registers for at least five years and no more than ten years after the entity has been struck off the register (Article 30(10)).
Amendments to the Fourth MLD should be transposed, and Member States should set up beneficial ownership registers for corporate and other legal entities, by the date which is 18 months after entry into force of the directive. The resolution is available here.