The EU Regulation 2015/849 entered into force on 26th of June 2017. The 4th AML Directive took into consideration the 40 new recommendations introduced by the Financial Task Force (FATF) which each Member State of the European Union must ensure compliance. Below follows a summary of the key aspects of the Directive.
Cash payment threshold lowered to €10,000
The 4th AML Directive has reduced the threshold for transactions regarding cash payments from EUR 15,000 to EUR 10,000. Therefore, as per the new regulations, an extensive Customer Due Diligence (CDD) procedure must be carried out when cash transactions reach an aggregated amount of EUR 10,000 to ensure compliance with the new EU Directive.
Politically Exposes Persons (PEPs)
The 4th AML Directive encourages the Member States to implement national legislation to advance the risk assessment procedures and introduce new guidelines concerning the review of PEPs. The rules concerning PEPs are extended and they now introduce two distinct categories of PEPs, the domestic and foreign PEPs which, under the new EU Directive, will be subject to the same risk assessment rules and scrutiny as the PEPs that were found outside of each European Member State.
Emphasis on Ultimate Beneficial Ownership (UBO)
The EU Directive requires all Member States to put in place safeguards tackling the regulation of beneficial ownership information for corporate and legal entities. According to the 4th AML Directive, each Member State of the European Union is obliged to create and maintain an accurate register containing information regarding the beneficial owners of the said legal entities. As per the new EU Directive, access to these registers will be with the competent authorities and Financial Intelligence Units, including any person who can demonstrate a ‘legitimate interest’ in the company.
Overall, the EU Directive implements stricter regulations concerning legal entities and individuals from third-countries. The 4th AML Directive puts in place a non-exhaustive list containing risk factors to be taken into consideration while conducting the relevant risk assessment procedures. The new EU regulations aim at enhancing the CDD procedures for high-risk individual and legal entities from third countries and encourage each Member State of the European Union to implement national legislation with preventative measures regarding money laundering and terrorism financing.
Our professionals and legal team has the experience and expertise to provide advice and assistance on all matters relating to the new regulation. Feel free to contact Stephanos Evangelides, Director- Legal Services at Evangelides & Partners at firstname.lastname@example.org or Charles Savva, Managing Director, Tax & Immigration Advisor at Savva & Associates at email@example.com for an initial consultation.