EU Fourth Anti-Money Laundering Directive

Our world is changing and we have a new legislation to consider in our line of business. The money laundering and terrorist financial prevention act has been passed called the Anti-money laundering act (AML act). It is the European Union Fourth Anti-Money Laundering Directive (EU 4th AML directive) enacted on 25th June 2015 that replaces the Third EU AML Directive, meaning that all EU member states must be compliant by 26th June 2017. It has been called “the most sweeping AML legislation in Europe in several years”.

Key changes in the EU 4th AML directive

  • The directive applies to various businesses of all sizes conducting transactions, so called “obliged entities”.
  • A new term is introduced, “holistic risk-based approach” requiring the use of evidence-based decision-making to target the risk of money laundering and terrorist financing.
  • Emphasis on ultimate beneficial ownership (UBO) and enhanced customer due diligence (CDD).
  • The definition of a Politically Exposed Person (PEP) is expanded to include all national PEPs as being high-risk customers.
  • For providers of goods the cash payment threshold has been limited to €10,000 but can be lower on a National level.
  • The act has been expanded to include the entire gambling sector beyond just casinos.
  • Tax crimes are added to the list of predicated offenses for money laundering and should be reported to the national authorities.

There are challenges facing these obliged firms in meeting the requirements of the Fourth EU AML Directive. This white paper aims to outline the key changes compared to the Third EU AML Directive and discuss the importance of having a solid risk based system solution, such as Trapets InstantWatch AML and KYC, that allows you to meet the new requirements and challenges ahead.

White paper regarding 4th AML directive

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