European agreement on amending AMLD4 – public register of beneficial owners

Věra Jourová, the European Commissioner for @EU_Justice, @EU_Consumer and Gender Equality has yesterday informed the public that two committees (LIBE and ECON) have agreed with the amendments proposed to the Fourth EU Anti-money Laundering Directive (AMLD4).

More details are to be found in the following press release by the ECON and LIBE committees of the European Parliament:

Public to get access to information on beneficial owners of firms in EU
Press Releases ECON LIBE 29 January 2018

  • Information on beneficial owners of companies to be made available to all
  • Parliamentary committees back closer controls on virtual currencies
  • Additional reporting roles for Commission

In a bid to shed light on the true ownership of letterbox companies, any citizen will, in future, be able to access data about the beneficial owners of firms which operate in the EU.
Members of the Economics Committee and the Home Affairs Committee supported on Monday — by 56 votes to 0 votes, with 5 abstentions — a December agreement reached with the Council and Commission, which also proposed closer regulation for virtual currencies, like Bitcoins, to prevent their being used for money laundering and terrorism financing.

The agreement represents the fifth and latest update to the EU’s Anti-money laundering Directive and is a response to the terrorist attacks of 2015 and 2016 in Paris and Brussels, as well as the Panama Papers leaks.

Public access to information on beneficial owners of firms
The reforms giving citizens the right to access information on the beneficial owners of firms which operate in the EU could help quash the corrupt use of letterbox companies created to launder money, hide wealth and avoid paying taxes — a practice which received widespread attention in the wake of the Panama Papers.
An additional measure would also open up data on beneficial owners of trusts and similar arrangements to those who can demonstrate a “legitimate interest”. This would make information on trusts available to investigative journalists and non-governmental organisations (NGOs).
Member states will also retain the right to provide broader access to information, in accordance with their national law.

Customer verification for virtual currencies
The new measures also seek to address risks linked to prepaid cards and virtual currencies. In a bid to end the anonymity associated with virtual currencies, virtual currency exchange platforms and custodian wallet providers will have to apply customer due diligence controls including customer verification requirements.
These platforms and providers will also have to be registered, while currency exchanges and cheque cashing offices, and trust or company services providers will similarly have to be licensed or registered.

Other measures agreed as part of the update include:

– a reduction in the threshold for identifying the holders of prepaid cards from €250 to €150;
– tougher criteria for assessing whether third countries pose an increased risk of money laundering and closer scrutiny of transactions involving nationals from risky countries (including the possibility of sanctions);
– protection for whistleblowers who report money laundering (including the right to anonymity);
– an extension of the Directive to cover all forms of tax advisory services, letting agents, art dealers, as well as electronic wallet providers and virtual currency exchange service providers who will need to know the identity of their customers and report suspicious transactions.

The agreement also gives the Commission a number of additional reporting responsibilities including the obligation to report on Member States‘ action in the face of complaints regarding non-compliance on anti-money laundering rules. It has also been tasked with reporting on the cooperation between Member States in the area of anti-money laundering and possible improvements to that cooperation.

The agreement must now be endorsed by the full plenary of the Parliament.


Attachment to the message of Věra Jourová:


This post is also to be found on my general blog.

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