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2019 Supplements to the 4th EU Anti-Money Laundering Directive – Anti-money Laundering and Counter Terrorist Financing

05.08.2019

In 2019, the EU introduced a new directive containing measures to combat the financing of terrorism and money laundering in third countries. Commission Delegated Regulation (EU) 2019/758 dated January 31, 2019 was published in the Official Journal of the EU on May 14 and took effect on June 3, 2019, and its practical application is slated to start on September 3, 2019.

The proposed supplements to existing 4th EU Anti-Money Laundering Directive (EC) 2015/849 relating to standards and measures for credit/financial institution aimed at countering the risks of money laundering in third countries contain provisions on the following matters:

  • actions of financial institutions in terms of anti-money laundering measures in cases it is established that third-country legislation applies contravening policies and procedures under Articles 45 (1) and (3) of the 4th Directive;
  • actions of financial institutions at the level of subsidiaries based in third countries in order to prevent the financing of terrorism and the illegal movement of monetary assets;
  • in the event it is impossible to implement the measures specified in the regulation, subsidiaries or branches in third countries shall be closed down.

A complete list of anti-money laundering measures is available on the official EU website.

Further, be reminded of the 5th EU Directive (AMLD5) amending 4th EU Directive 2015/849, which shall be transposed into national law by EU member states by the end of 2019 and take full effect after by January 10, 2020. The document contains the below supplements to the 4th EU Directive:

  • increase the transparency of trusts, companies and other legal mechanisms by creating a public register;
  • provide access to financial information to EU regulators to enable them to perform their responsibilities;
  • ensure minimal anonymity of virtual currency, prepaid wallets and electronic storage providers;
  • extend the criteria for assessing financial risk in third countries;
  • in all EU member states, compile a central register of securities accounts and search engines;
  • expand the scope of information exchange and increase the level of trust between anti-money laundering watchdogs.

Based on the foregoing, it can be deduced that the EU is consolidating control over financial operations in EU countries and third countries.