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 vote was passed by 573 to 12 in favour with 62 members voting undecided. The Directive aids the common reporting standard initiative by making information on the beneficial owners of firms operating in the EU public knowledge. The Directive also affects trusts, as information will also have to be collected for them however only those with legitimate interest will be able to access them.
Going forward, each 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. Access restrictions will be granted in certain exceptional circumstances, including cases where there is a high risk of fraud, blackmail or intimidation, in an extremely limited manner.
The Directive will also introduce closer regulation for virtual currencies such as Bitcoin, to prevent their use for money laundering and terrorism financing. Virtual currency exchanges should register and will have to adhere to the same customer due diligence 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.