Anti-Money Laundering Directive 5 (5AMLD)

In February 2016, the European Commission launched an Action Plan against terrorist financing after the terrorist attacks in Paris and Brussels. As part of that action plan, the European Commission proposed a fourth revision of the Anti-Money Laundering Directive, which evolved into the 5AMLD.

Under the 5AMLD the categories of so-called ‘obliged entities’ (i.e. entities that fall under the ambit of the AMLD) will be extended to virtual currency exchange service providers and custodian wallet providers. Persons providing material support or advice in the field of taxation and art traders are also new obliged entities under the 5AMLD. Furthermore, real estate agents are new obliged entities when acting as an intermediary in the rental of real estate, but only when it concerns transactions for which the monthly rent is EUR 10,000 or more, as well as  art traders in case the (set of interrelated) transaction(s)  amounts to EUR 10,000 or more.

The aim of the 5AMLD is to bring more transparency to improve the fight against money laundering and terrorist financing. The directive covers terrorist financing risks related to virtual currencies and risks linked to anonymous pre-paid instruments and provides for enhanced cooperation between Financial Intelligence Units (FIUs), which should make it easier for FIUs to request information. 5AMLD introduces additional enhanced due diligence (EDD) requirements regarding high risk third countries and introduces a central data retrieval system with regard to ownership information in all European Union member states. Obliged entities will have to notify the authorities of discrepancies found between the beneficial ownership information in the central data retrieval system and the beneficial ownership information they hold otherwise.

Implementation / enforcement 07/2016 - 11/2016
Discussion / consultation 11/2016 - 07/2018
Implementation / enforcement 07/2018 - 01/2020
In effect 01/2020 -

The AMLD 5 needs to be implemented into national law by 10 January 2020

The 5AMLD aims to prevent the use of the financial system for the funding of criminal activities and to strengthen transparency rules to prevent the large-scale concealment of funds. To be ready for 5AMLD, it is important that obliged entities ensure they have an effective mechanism in place to respond to FIU requests. Furthermore, it is required that employees are trained on the new EDD requirements and that they are aware of their obligation to report discrepancies in ownership information. It is advised that obliged entities re-evaluate the information in their KYC records and that they implement the new EDD requirements in their policies, procedures and systems.

Leen Groen Director
Categories: Financial Crime Money Laundering