The following Risk & Compliance guidance note provides comprehensive and up to date legal information covering:
The Fourth Money Laundering Directive (4MLD), replacing the Third Directive which had been in force since 2005, was transposed across Europe in June 2017. A mere 13 months later, in July 2018, the Fifth Money Laundering Directive (5MLD) came into force.
It is an ‘Amending Directive’ because it amends 4MLD. Implementing the requirements of 5MLD involved the UK government making changes to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017), SI 2017/692 through the Money Laundering and Terrorist Financing (Amendment) Regulations 2019, SI 2019/1511 in force from 10 January 2020. See below: Timeline.
This Practice Note sets out the background to 5MLD and the key changes it introduces. It summarises the key changes brought about by the MLR (Amendment) Regulations 2019 and discusses future developments.
Money laundering and terrorist financing present fast-moving, ever-evolving and unpredictable risks. The nature of those risks changed so significantly during the course of negotiations on and implementation period for 4MLD that 5MLD was already on the table before the ink had dried on 4MLD.
Lots happened in that very short space of time:
the Panama Papers revealed the widespread use of trusts and offshore structures to launder money generated from bribery, corruption and tax evasion
the Paradise Papers confirmed that tax avoidance is a booming industry and that
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