EU Fifth Anti-Money Laundering Directive now set for statute books

The vote was passed by 574 to 13 with 60 abstentions.

The Directive will give the public full access to information on the beneficial owners of firms operating in the EU. The corresponding information will also have to be collected for trusts, but access to it will be limited to those with a ‘legitimate interest’, the definition of which is 'governed by the law of the Member State where the beneficial ownership information of the trust or similar legal arrangement is registered’.

Member States can also insist on registration and the payment of a small fee, so that the accessing of such information would be traceable. Restrictions on access will be allowed in certain circumstances, including where there is a risk of fraud, kidnapping, blackmail, violence or intimidation, though the ability to create exceptions of this nature is limited.

The Directive will also introduce closer regulation for virtual currencies such as Bitcoin, to prevent their use for money laundering and terrorism financing. Virtual currency exchanges and wallet providers will have to be registered and will have to apply the same customer due diligence controls as do banks. The threshold for identifying the holders of prepaid cards will be reduced from EUR250 to EUR150.

The updated Directive will soon be formally adopted by the European Council and then gazetted in the Official Journal of the European Union. Member States will then have 18 months to transpose the new rules into national law. However, as the UK is formally leaving the EU on 29 March next year, it will have to decide whether to transpose the Directive. Even if it does not, some, or all, of the Directive could take effect by agreement in the UK during the Brexit transition period.

Sources

• European Parliament
• European Parliament (Directive, adopted text)
• Kingsley Napley
• Camilleri Preziosi
• STEP International News, 18 December 2017