The Commission set out its proposal for amendments to the Money Laundering Directive on 5 February 2013 to combat the threats of money laundering and financing of terrorism.
The international panel of experts at the FATF published a new set of standards in early 2012 in response to the enormous economic and social damage caused by money laundering and terrorism. With its proposal for a new Directive, the Commission is implementing the recommendations for combating money laundering and the financing of terrorism, and even goes further in some cases.
A more carefully targeted and risk-oriented approach is intended to guarantee the flexibility required to adapt to new threats and players. Accordingly, it is not only the authorities of the Member State but also individuals and companies with obligations under the draft Directive that will be required to ascertain and analyse specific risks and to organise their protective systems in line with the relevant risk. The Commission’s proposal for a 4th Money Laundering Directive aim to introduce the following specific changes to the current legal position:
The catalogue of predicate offences will be expanded so that tax offences would also be contained. This would force the German legislator to tighten section 261 of the German Criminal Code (StGB), which up to now has provided that tax offences are only considered predicate offences if conducted on a commercial scale.
In addition, the adressees of the persons obliged in the fight against money laundering and / or the financing terrorism will be expanded. For instance, the threshold value for cash transactions for individuals trading commercially in goods triggering KYC measures will be reduced from EUR 15,000 to EUR 7,500. Providers of gambling services would also be placed under this obligation for the purposes of general expansion of the scope of the Money Laundering Directive to the gambling sector. The latter had already been anticipated in Germany by way of a new provision in the national Money Laundering Act.
There are additional changes as to the design of the risk-based approach: for instance, the all too permissive and abstract simplified duties of care under the 3rd Money Laundering Directive will be modified to place greater emphasis on the individual case. In this respect the rigid exclusion criteria that apply under the existing law would at best be included in a catalogue of indicators for determining the duties of care in an individual case. Enhanced duties of care would arise in particular in connection with individuals with political exposure, which under the future law will also include such individuals from EU countries and those working for international organisations.
Other changes focus on improving cooperation between centralised national reporting offices for money laundering and / or the financing of terrorism. The Commission also wants to create greater consistency between Member State regulations through detailed specifications of sanctions in the event of systematic breaches of the Directive.
At the same time as the draft Directive, the Commission presented a proposal for a Regulation on information accompanying transfers of funds to secure due traceability of these transfers. The proposals would need to be passed by the European Parliament and the Council of Ministers before being enacted into law.