5 things you need to know about the fourth anti-money laundering directive underway in the European Union.
It isn’t always easy to get multiple stakeholders to agree to change. But after much discussion (and some bickering), the European Union finally passed the Fourth Anti-Money Laundering Directive earlier this year. Financial institutions operating in an EU member state have until 2017 to meet the new reporting and disclosure requirements aimed at disrupting terrorist financing, corruption and money laundering. And in just a few months, financial institutions need new account onboarding procedures put into place no later than January 1, 2016.
In a nutshell, here’s what you need to know:
- The entire gambling spectrum is now subject to these regulations, not just casinos.
- Enhanced customer due diligence is required.
- The cash payment threshold was lowered to €7500.
- The description of a politically exposed person (PEP) was expanded. PEPs are now defined as any politically exposed person, domestic or foreign, including heads of state, government and judiciary members and directors (and close family members) of state-owned enterprises
- Financial institutions must know the ultimate beneficial owner. This may be the most onerous of the new regulations, as it requires institutions and legal entities (such as trusts) to apply intensive customer due diligence measures to not only verify the customer but to validate his/her intent of the business — and to monitor that business relationship over time.
CEO of the Alacer Group. Sharing the latest news in financial crimes and best practices that enable financial institutions to prevent money laundering.