Proposals for a Fourth Anti-Money Laundering Directive

The European Central Bank (“ECB”) and the Economic and Monetary Affairs Committee (“ECON”) have issued opinions following the adoption by the European Commission, on 5th February 2013, of a Proposal for a Fourth Anti-Money Laundering Directive and a Proposal for a Regulation on Information Accompanying Transfers of Funds, to reinforce the EU’s existing rules on anti-money laundering and fund transfers.

ECB Opinion

The opinion lays out a concise summary of the proposed changes in the proposal for the Fourth Anti-Money Laundering Directive and the proposal for a Regulation on Information Accompanying Transfers of Funds and presents a number of suggestions for changes to these proposals.

The ECB’s observations may be summarised as follows:

• The ECB considers that the proposed EU instruments correctly and effectively address the weaknesses identified in the current EU regime.
• Member States may decide to further lower the thresholds set by the proposed Directive or to take even stricter measures, for example, in the case of transactions between dealers in high-value goods and non-business customers amounting to €7,500 or above – It appears that Article 5 of the proposed Directive would permit Member States to choose to apply stricter measures than merely requiring the dealer to satisfy the customer due diligence, reporting and other relevant obligations under the proposed directive. The ECB recommends that any such measures should be carefully weighed against the expected public benefits.
• The ECB recommends that the exemption of parties providing messages or other support services from the scope of the directive should be provided in the enacting terms of the proposed EU instruments.
• The ECB suggests that Article 2 of the proposed regulation be amended as follows:
  – The definitions of “payer” and “payee” should be aligned with the definitions of these terms in the Payment Services Directive (PSD).
  – The concept of “payment service provider” is established by the PSD and limited to six different categories of providers of such services listed in the PSD.
  – Accordingly the definition of this concept in the proposed regulation should refer to the PSD.
  – The definition of ‘’a person-to-person’ transfer of funds” should be more clearly defined as a transaction between two natural persons, both acting in their personal capacity outside the scope of their business, trade or profession.

Click here to view the complete version of the ECB Opinion.

ECON’s Opinion

ECON’s principal observations include:

• Competent authorities should be proactive in combatting new and innovative ways of money laundering;
• A suggestion for earlier guidance from the European Supervisory Authorities – suggesting the time period be reduced to 1 year;
• The need to improve the beneficial owners’ register, so as not to place a disproportionate burden on companies;
• The need for more clarity on money laundering risk assessments and what they should comprise;
• Member States should ensure that obliged entities not only comply with the relevant rules and guidelines, but also have systems in place that actually minimise the risks of money laundering within those entities;
• The need for Member States to provide FIUs with the necessary resources to ensure full operational capacity to deal with the current challenges posed by money laundering and terrorist financing;
• Recognition of the electronic signature as a safeguard against non-face-to-face relationships; and
• A coherent and effective supervision has to be achieved for group entities – this can be done through adequate cooperation of the authorities between home and host countries.

Click here to view the complete version of the ECON Draft Opinion.

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