Tougher EU AML rules to fight tax eva­sion, ter­ror­ist fund­ing

Financial Mirror (Cyprus) - - FRONT PAGE -

The ul­ti­mate own­ers of com­pa­nies will have to be listed in cen­tral reg­is­ters in EU coun­tries, open both to the au­thor­i­ties and to peo­ple with a “le­git­i­mate in­ter­est”, such as in­ves­tiga­tive jour­nal­ists, un­der new rules al­ready agreed with the Coun­cil and en­dorsed by the Euro­pean Par­lia­ment on Wed­nes­day.

The new anti-money laun­der­ing di­rec­tive aims to step up the fight against tax crimes and ter­ror­ist fi­nanc­ing, while new rules to make it eas­ier to trace trans­fers of funds were also ap­proved.

The fourth anti-money laun­der­ing di­rec­tive (AMLD) will for the first time oblige EU mem­ber states to keep cen­tral reg­is­ters of in­for­ma­tion on the ul­ti­mate “ben­e­fi­cial” own­ers of cor­po­rate and other legal en­ti­ties, as well as trusts. Th­ese cen­tral reg­is­ters were not en­vis­aged in the Euro­pean Com­mis­sion’s ini­tial pro­posal, but were in­cluded by MEPs in ne­go­ti­a­tions.

The text also sets out spe­cific re­port­ing obligations for banks, au­di­tors, lawyers, real es­tate agents and casi­nos, among oth­ers, on sus­pi­cious trans­ac­tions made by their clients.

The cen­tral reg­is­ters will be ac­ces­si­ble to the au­thor­i­ties and their fi­nan­cial in­tel­li­gence units (with­out any re­stric­tion), to “obliged en­ti­ties” such as banks do­ing their “cus­tomer due dili­gence” du­ties, and also to the public. How­ever, public ac­cess may be sub­ject to on­line reg­is­tra­tion of the per­son re­quest­ing it and to a fee to cover ad­min­is­tra­tive costs.

To ac­cess a reg­is­ter, a per­son or or­gan­i­sa­tion (e.g. in­ves­tiga­tive jour­nal­ists or NGOs) will in any event have to demon­strate a “le­git­i­mate in­ter­est” in sus­pected money laun­der­ing, ter­ror­ist fi­nanc­ing and in “pred­i­cate” of­fences that may help to fi­nance them, such as cor­rup­tion, tax crimes and fraud.

Th­ese per­sons could ac­cess in­for­ma­tion such as the ben­e­fi­cial owner’s name, month and year of birth, na­tion­al­ity, coun­try of res­i­dence and de­tails of own­er­ship. Any ex­emp­tion to the ac­cess pro­vided by mem­ber states will be pos­si­ble only “on a case-by-case ba­sis, in ex­cep­tional cir­cum­stances”.

Cen­tral reg­is­ter in­for­ma­tion on trusts will be ac­ces­si­ble only to the au­thor­i­ties and “obliged en­ti­ties”.

The text clar­i­fies the rules on “po­lit­i­cally-ex­posed per­sons”, i.e. peo­ple at a higher than usual risk of cor­rup­tion due to the po­lit­i­cal po­si­tions they hold, such as heads of state, mem­bers of gov­ern­ment, supreme court judges, and mem­bers of par­lia­ment, as well as their fam­ily mem­bers.

Where there are high-risk busi­ness re­la­tion­ships with such per­sons, ad­di­tional mea­sures should be put in place, e.g. to es­tab­lish the source of wealth and source of funds in­volved, says the di­rec­tive.

MEPs also ap­proved a “trans­fers of funds” reg­u­la­tion, which aims to im­prove the trace­abil­ity of pay­ers and pay­ees and their as­sets.

Mem­ber states will have two years to trans­pose the anti-money laun­der­ing di­rec­tive into their na­tional laws. The trans­fers of funds reg­u­la­tion will be di­rectly ap­pli­ca­ble in all mem­ber states 20 days af­ter its pub­li­ca­tion in the EU Of­fi­cial Jour­nal.

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