- The 5th Anti-Money Laundering Directive
Our take on 5th AML Directive in 60 seconds
The scope of the directive is extended to include virtual currency exchanges, estate agents and rental intermediaries, art dealers, customers who are applying for Citizenship or Residency by Investment, and more.
These stricter requirements, although necessary to fight back against the increasing scale and impact of financial crime, can add significantly to the day-to-day challenges faced by obliged entities, especially given that many compliance teams already experience time and resource constraints.
Given that failure to adhere to the requirements of the 5th AML Directive carries not only the risk of financial and regulatory fallout, but also potentially severe reputational damage, adopting a best practice and comprehensive approach to the 5th AML Directive compliance should begin with ensuring access to trusted data, and investing in the right tools to automate and streamline key risk mitigation processes. Below are some of important areas of change worth noting and how we can help you.
Here are the essentials
Crypto currencies will face more stringent controls, with exchanges being required to register with the relevant authorities in their jurisdictions, conduct customer due diligence, and prepare suspicious activity reports where necessary. Financial Intelligence Units (FIUs) will be required to keep records of those purchasing virtual currency.
Greater emphasis on transparency around ultimate beneficial ownership (UBO) as part of a targeted attempt to fight back against financial criminals who hide behind often complex and opaque corporate structures. Member states will be required to maintain publicly available national UBO registries.
Member states are required to create and publicly release functional PEP lists that include all titles, roles or functions that are deemed to be politically exposed.
The directive extends the range of high-value goods that will be subject to reporting requirements and regulatory enforcement, including art, oil, arms, precious metals, tobacco, historical, cultural and archaeological artefacts.
When dealing with high risk countries — specifically those identified by the EU as having sub-standard AML regulations — companies will be required to perform enhanced due diligence, which may also include Source of Wealth investigations.
The limit of prepaid cards is lowered from €250 to €150, with a €50 online/remote limit applicable. Only cards issued within the EU are allowed, unless they were issued in a country with legislation that is deemed on par with EU AML standards.
How World-Check Risk Intelligence can help with your AML compliance
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Fulfill your due diligence obligations and identify potential criminal activity with information from reputable public domain sources. World-Check Risk Intelligence data will also help you fulfill your Politically Exposed Persons (PEPs) monitoring requirements.
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