The European Parliament last week voted with a landslide of approvals regarding the final wording of the Fifth Anti-Money Laundering Directive, supporting the multilateral agreement reached between Member States’ ministers in December last year.
The Directive assists the common reporting standard initiative by:
Making information on the Beneficial Owners of companies operating in the EU public knowledge.
Details on Trusts will also have to be reported however only those with legitimate interest will be able to access them.
Going forward, each European member state will have the option to make each new company register and the pay a small fee, in order to allow access to such information in a traceable way.
In certain exceptional circumstances, access restrictions will be allowed. This includes companies and cases involving a high risk of fraud, blackmail or intimidation, in an extremely limited manner.
The Directive will also allow for stricter monitoring regulations for virtual currencies such as Bitcoin, to prevent their use for money laundering & terrorism financing. Virtual currency exchanges should register and will have to adhere to the same Client Due Diligence (CDD) controls as banks and financial institutions. The threshold for identifying owners of prepaid cards will be reduced from EUR €250 to €150.
The updated Directive will soon be formally adopted by the European Council and then published in the Official Journal of the EU. Member States will then have an 18-month deadline to transpose the new regulations into local law.
However, as the UK is formally leaving the EU on March 29th 2019, it no longer has the mandatory obligation to integrate the Directive. Even if it does not, some, or all, of the Directive could take effect by agreement in the UK during the Brexit transition period.