Update on the fifth Anti-Money Laundering Directive
On 13 December 2017, a provisional agreement on the final text of the fifth Anti-Money Laundering Directive, known as 5MLD, was published. This will amend the current Fourth Anti-Money Laundering Directive, and once the text has been approved by the Permanent Representatives Committee and an agreement is reached between the European Parliament and Council, 5MLD will be formally adopted – although the exact date of implementation is yet to be determined. A summary of the key changes to the Anti-Money Laundering Directive that 5MLD will bring includes:
- The definition of estate agents that are within the scope of the Directive has been widened in 5MLD to include lettings agents where the rent is equivalent to, or includes €10,000 or more.
- The scope of the Directive has been widened to include additional persons, such as providers engaged in exchange services between virtual currencies and fiat currencies, and custodian wallet providers. Firms providing these services will be required to register for AML supervision.
Trust Beneficial ownership
- Clarification that beneficial owners within a trust arrangement are defined as being either a settlor, another Trustee or a Protector, and that if the role is yet to be determined, this is the class of persons in whose main interest the legal arrangement was set up.
Due diligence changes
- The threshold value for the application of Simplified Due Diligence (SDD) has been reduced from €250 to €150 in respect of e-money transactions which are subject to certain conditions, for example where the payment instrument cannot be funded using anonymous e-money.
- The methods of carrying out Customer Due Diligence (CDD) was widened to include any secure, remote or electronic identification process that is regulated, recognised, approved or accepted by the relevant national authorities.