Consulting

Anti-money laundering regulations to be adjusted


The third Anti-Money Laundering Directive as a legal framework is based on standards established by the Financial Action Task Force (FATF) and states that it falls into the responsibility of the EU to protect the financial system against money laundering and terrorist financing. One of the obligations internationally agreed upon is that the EU Commission will review and appropriately adjust its legislation. In the meantime, a corresponding report has been approved by the Commission. The Commission plans to propose a fourth Anti-Money Laundering Directive this autumn, following the conclusion of the public consultation period on June 13, 2012.

Based upon an examination of the provisions of the directive, the report draws the conclusion that no fundamental shortcomings have been identified. Nevertheless, adjustments are deemed necessary. In the words of Internal Market Commissioner Michel Barnier: "There are no limits to the ingenuity of criminals when it comes to exploiting legal loopholes. It is our goal to put forth clear and appropriate provisions that are designed to protect the internal market without imposing excessive burden on market players."

A particular need for action seems to exist in two areas: On the one hand, this concerns the possibility of extending the scope of the provisions in order to ensure, amongst others, a more comprehensive coverage of the gambling sector and the incorporation of tax crimes as so-called predicate offences for money-laundering. On the other hand, there is the aim of clarifying the provisions relating to due diligence obligations of banks and other regulated institutions towards their customers. This especially applies to the controls and methods employed in order to identify who the customers are and what type of customer transactions are involved. The main purpose of the revised provisions is to guarantee that simplified procedures of banks and other regulated institutions are not wrongly perceived as complete exceptions to customer due diligence requirements.

In addition, it is the aim to increase the powers of those institutions acting as central, national data collection agencies in this matter, the Financial Intelligence Units (FIU), and to enhance their cooperation. The FIU are responsible for collecting and analyzing information on suspected money laundering and terrorist financing and for communicating such information to the competent authorities.

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