Full speed ahead on the Fourth Anti-Money Laundering Directive

By Irina Nechifor

On 2 February 2016, the EU Commission announced its Action Plan to strengthen the fight against terrorist financing.

Following a recent trend of delayed developments and potential push-backs in the implementation of various financial services related legal initiatives, the EU Commission announced, with a sense of urgency, that it intends to act swiftly on amending the Fourth Anti-Money Laundering Directive (AMLD 4), and urged Member States to bring forward the date for effective transposition and entry into force of AMLD 4 by the end of 2016 at the latest.

As requested during the extraordinary Justice and Home Affairs Council meeting on 20 November 2015, the Commission confirmed its plan to start developing a number of proposals that will amend and extend the following features of AMLD 4:

  • Enhance due diligence measures/counter-measures to be taken on high risk third countries
  • Bring anonymous virtual currency exchanges under the control of competent national authorities and potentially including virtual currency ‘wallet providers’
  • Address the concerns raised by the anonymity of prepaid instruments (eg. prepaid cards)
  • Obtain a clear EU ‘list of high risk third countries’
  • Supplement the powers of the EU Financial Intelligence Units (FIUs) and expedite their means of cooperation and communication by introducing centralised bank and payment account registers, and harmonise the rules covering FIUs with the latest international standards

What next?

The EU Commission has proposed immediate action on the concrete application of UN freezing orders by all EU Member States, and will offer to provide technical assistance to 3rd countries in order to align them to the UN sanction and asset freezing measures.

The focus for the 2nd quarter of 2016 targets sources of funding, as the EU Commisison has confirmed that it is planning to bring virtual currency exchange platforms under the scope of AMLD 4, in order to ensure that users trading in virtual currencies may be identified.

The Commission has announced the following actions to be taken by the 4th quarter of 2016:

  • Legislative proposal for harmonizing money laundering criminal offences and sanctions
  • Legislative proposal to counter illicit cash movement

 

The Commission has announced the following actions to be taken by the 1st quarter of 2017:

  • To publish a report on money laundering and terrorism financing recommendations to the Member States
  • Put forward a legislative proposal to strengthen the power of customs authorities to tackle terrorists’ trade in goods, especially cultural goods.

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