The Fourth Anti-Money Laundering Directive

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December 14 09:06 2015 by The Editor Print This Article

On the 26th of June 2015, the Fourth Anti-Money Laundering Directive (4th AMLD) came into force, and EU Member States now have two years to transpose the AMLD into national law. The Directive is applicable to all ‘obliged entities’; being financial and credit institutions, as well as,  legal or natural persons acting in the exercise of their professional activities. This includes external accountants, tax advisors, auditors, notaries and other independent legal professionals, as well as, trust or company service providers, estate agents and other persons trading in goods to the extent that payments are made or received in cash amount to EUR 10 000 or more. The transaction may be carried out in one single operation or in several operations which appear to be related.

The Fourth Anti-Money Laundering Directive introduces new rules which include:

  • The creation of registers of ownership information on the beneficial owners of companies, as well as, trusts;
  • The creation of a list containing names of PEPs, as well as, their relatives and close associates to assist obliged entities in identifying these individuals;
  • The introduction of EU and national level risk assessment. Nevertheless, obliged entities would assist in this process by conducting their own risk assessment of their business and customers;
  • The Politically Exposed Person (PEP) regime is to be extended to domestic PEPs as well as, persons having a prominent function in an international organisation;
  • The elimination of the automatic application of Simplified Customer Due Diligence to specific customers and products;
  • Additional sanctions are to be imposed upon breaches of Anti-Money Laundering and Counter Terrorist Financing responsibilities by obliged entities

Obliged entities are now required to have additional information about their customer base and their commercial partners’ businesses, as well as the beneficial owners – which information and findings are to be documented.

The Directive will bring about new challenges in the gaming industry, mainly relating to cross-border matters and issues related to the PEP regime, particularly where the gambling operator has players situated in multiple jurisdictions. In such cases, players have to be checked for local/foreign/international political exposure. In addition, uncertainty may arise over which laws of which jurisdictions should apply and which Financial Intelligence Units to report to.

The regulation of money laundering is considered to be a key aspect of EU regulation. Whilst the Directive brings about new challenges, yet it is another stepping stone in the fight against financial crime within the European Union.