MLD4—key provisions for financial services firms—one minute guide
MLD4—key provisions for financial services firms—one minute guide

The following Financial Services practice note provides comprehensive and up to date legal information covering:

  • MLD4—key provisions for financial services firms—one minute guide
  • Background to MLD4
  • UK implementation of MLD4
  • Brexit
  • Scope of MLD4 and the MLRs
  • Obliged entities/relevant persons
  • Risk assessments, controls and procedures
  • Customer due diligence (CDD)
  • Simplified due diligence (SDD)
  • Enhanced due diligence (EDD)
  • More...

MLD4—key provisions for financial services firms—one minute guide

Background to MLD4

The Fourth Money Laundering Directive (EU) 2015/849 (MLD4) was adopted by the European Parliament on 20 May 2015, becoming effective on 25 June 2015, providing the basis of the European Union’s anti-money laundering (AML) and counter terrorist financing (CTF) laws. It replaced the Third Anti-Money Laundering Directive (2005/60/EC) (MLD3) and the related implementing Directive (2006/70/EC).

The MLD4 package was introduced with the following legislation:

  1. the Fourth Money Laundering Directive (EU) 2015/849 (MLD4) on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012, and repealing Directive 2005/60/EC (MLD3) and Commission Directive 2006/70/EC; MLD4 became effective on 25 June 2015—the final date for implementation of MLD4 by Member States was 26 June 2017, and

  2.  the Second Wire Transfer Regulation (EU) 2015/847 (EU WTR2) on information accompanying transfers of funds and repealing Regulation (EC) No 1781/2006 (WTR1); EU WTR2 has direct effect within the EEA from 26 June 2019

MLD4 ensured alignment with the recommendations of the Financial Action Task Force (FATF), the global AML and CTF regulation setting body (see Practice Note: Financial Action Task Force (FATF)). Shortly after the finalisation of MLD4, terrorist attacks in Paris and Belgium and the revelations in the Panama Papers, prompted amendments to MLD4 which, among other provisions, extended AML obligations to

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