On 20th May 2015, the European Parliament voted to adopt the Fourth Anti-Money Laundering Directive and Regulation (AML IV), implementing the recommendations by the Financial Action Task Force (FAT F), expanding the FAT F’s requirements in some areas and providing for additional safeguards will be another challenge for Malta and Maltese companies providing financial services to international clients.
AML IV will oblige EU Member States to keep central registers of information on the ultimate ‘beneficial’ owners of corporate and other legal entities, as well as trusts. The central registers will be accessible to:
- the authorities and their financial intelligence units (without any restriction),
- ‘obliged entities’ (such as banks when conducting ‘due diligence’ processes), and
- the public (although public access may be subject to online registration of the person requesting it and to a fee to cover administrative costs).
The central register information on trusts will be only accessible to the authorities and ‘obliged entities’.
To access a register, a person or organisation – such as investigative journalists or NGOs – will have to demonstrate a ‘legitimate interest’ in suspected money laundering, terrorist financing and/or in ‘predicate’ offences that may help to finance them, such as corruption, tax crimes and fraud.
The Directive equally sets out specific reporting obligations for banks, auditors, lawyers, real estate agents and casinos, among others, on suspicious transactions made by their clients. AML IV also clarifies the rules on ‘politically-exposed persons’. Where there are high-risk business relationships involving such persons, additional measures should be taken to establish the source of wealth and source of funds involved.
After the adoption of the Directive, Member States will have two years to transpose the directive into national law.
MEPs also approved a ‘transfers of funds’ regulation, which aims to improve the traceability of payers and payees and their assets. This regulation will be directly applicable in all EU Member States 20 days after its publication in the EU Official Journal.
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Click here to download European Parliament adopts Fourth Anti-Money Laundering Directive.