Full Speed Ahead on the Fourth Anti-Money Laundering Directive- Lexis®PSL Legal Ease

Written by Irina Nechifor

The Fourth Anti-Money Laundering Directive (Directive (EU) 2015/849) (AMLD4) came into force on 25 June 2015, and the original date for its implementation by member states was set for 26 June 2017. The main goal of AMLD4 is to prevent the use of the EU’s financial system for the purposes of money laundering and terrorist financing. On 2 February 2016, the EU Commission (Commission) published its Action Plan to further step up the fight against money laundering and terrorist financing by:

• bringing the AMLD4 implementation date forward to 2016; making a number of amendments to AMLD 4;
• speeding up actions that can be taken under the existing AMLD4 framework;
• and taking forward initiatives outside the ALMD4 framework.

This urgency contrasts with the recent trend of delayed developments and potential push-backs in the implementation of significant financial services legal initiatives – terrorist financing in its many possible forms is now firmly at the top of the Commission’s agenda.

How does the Commission intend to modify the existing AMLD4 framework?

The main amendments to AMLD4 proposed by the Commission relate to Virtual Currency (VC) transactions, prepaid instruments (such as prepaid cards) and centralised bank and payment account registers. There is increasing evidence that VC transfers are used by terrorist organisations to move and store illicit funds out of reach of law enforcement and other authorities. VC are currently not regulated at EU level, and whilst these transactions are recorded, they remain anonymous, and there is no reporting mechanism equivalent to that found in the mainstream banking system to flag and ident