FEBIS: Anti-Money Laundering

European Commission consults on its Action Plan for a comprehensive Union policy on preventing money laundering and terrorist financing

On May 7, the European Commission unveiled a new public consultation its Action Plan for a comprehensive Union policy on preventing money laundering and terrorist financing

The objective of the consultation is to seek comments on the 6 pillars outlined by the draft EC Action Plan on AML which are:

·         Ensuring the effective implementation of the existing EU AML/CFT framework

·         Establishing an EU single rule book on AML/CFT;

·         Bringing about EU level AML/CFT supervision.

·         Establishing a support and cooperation mechanism for FIUs; 

·         Enforcing Union-level criminal law provisions and information exchange.

·         Strengthening the international dimension of the EU AML/CFT framework.

One of key items outlined is to ensure effective transposition of the 5^th AMLD, which was due on 10 January 2020. The Commission has already launched a number of infringement proceedings against the Member States that failed to notify any transposing measures. The Commission will closely monitor the setting up of the central bank account mechanisms and the beneficial ownership registers by Member States in order to ensure that they are populated with high-quality data.

The Action Plan also says that work on interconnecting the beneficial ownership registers has already started and the interconnection will be operational in 2021. It also states that the lack of detail in the applicable rules and on the division of responsibilities with regard to cross-border issues results in differing interpretations of the Directive across Member States.

To limit divergences in the interpretation and application of the rules, certain parts of the AMLD should be turned into directly applicable provisions set out in a Regulation. At a minimum, this should include the provisions laying down the list of obliged entities, customer due diligence requirements, internal controls, reporting obligations, as well as the provisions on beneficial ownership registers and central bank account mechanisms. A more harmonised approach to the identification of politically exposed persons should also be considered

FEBIS Regulatory Committee will work on a submission to the consultation which runs until 29 July 2020 and is available here. 

Source: FEBIS