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professional services
5th Anti-Money Laundering Directive: What is changing?
tablish a list of PEPs which will include persons that represent bodies, functions, institutions and organizations of the EU.
Virtual Currencies The extensive usage of virtual currencies has created a need for By Christos Demetriou, Director, APC Audit Tax Advisory Ltd additional measures to be taken Vice-Chairman, Ethics and Institutions Specialised Working Group, ICPAC by exchange service providers in order to mitigate the risk of any potential financial crime. Such n June 2018, the 5th Antiin order for the register to be their maintenance/ongoing pro- measures include enhanced due diligence procedures for potential Money Laundering Direcadequate, accurate and current. cedures and service. clients that receive or exchange tive (AMLD) became law. Beneficial ownership registers virtual currencies services through The new AML Directive must be established by the Senior Managing Officials brings major changes and member states, following the The 5th Anti-Money Laundering an exchange service provider platdevelopments to the previtransposition of the 5th AntiDirective states that, whenever a form. th ous 4 Directive, and the EU Money Laundering Directive senior managing official or an of- Member States must ensure that member states must transpose into national law. The timeficial authorized representative is exchange service providers are those changes and developframe for establishment is as considered to be the responsible licensed, registered and regulated. ments into their national law follows: person under the law for repreBank and Real Estate Register by 10 January 2020. – Corporate and other legal senting an entity or a group of What is changing with the entities: 18 months from the entities, then the same principles In the view of the fight against 5th Anti-Money Laundering enforcement of the 5th AML and procedures as for a beneficial terrorist financing, Member States are required to set up a register Directive? Directive (i.e. 10 January 2020) owner apply to that official (i.e. – Trusts and similar structure identification procedures, record which will allow the competent authorities to retrieve information Professional service providers legal arrangements: 20 months keeping, etc.). such as natural and legal persons’ The 5th Anti-Money Launderfrom the enforcement of the 5th bank accounts, safe deposit boxes ing Directive clarifies that all AML Directive (i.e. 10 March Enhanced Due Diligence professional service providers, 2020) The 5th Anti-Money Laundering ownership and natural and legal including tax advisors - certified The 5th Anti-Money LaunderDirective requires that whenever persons’ ownership of real estate situated in their territory. or uncertified - fall under the ing Directive requires the Euro- a professional accountant in a scope of the legislation. pean Union to interconnect all member state is dealing with Prepaid Cards member states’ beneficial owna high risk third country cliAnonymous prepaid cards are inBeneficial Owners ership registers 32 months after ent, then specific measures to cluded in the scope of the 5th AntiInformation the 5th AML Directive becomes mitigate these risks need to be th Under the 5 Anti-Money law (i.e. 10 March 2021). taken, such as additional infor- Money Laundering Directive, by Laundering Directive, every EU mation for limiting the business introducing stricter measures for member state must establish a Electronic Verification relationship with clients from 3rd payment transactions above the th beneficial ownership register, The 5 Anti-Money Laundercountries and the prohibition of amount of €50. In cases where the payment amount exceeds the which will provide information ing Directive recognizes the professional accountants from €50, customer identification proabout entities, group entities and need for the identification/veriestablishing representing firms cedures apply. trusts and disclose the names of fication process of clients to be in such countries. the beneficial owners and the conducted by electronic means, The changes in the 5th Antisenior management personnel, which must be secure, indePolitical Exposed Persons Money Laundering Directive reresponsible for the management pendent, reliable and regulated (PEPs) quire measures and actions being of the group and/or entity. by the national authorities. The 5th Anti-Money LaunderThe beneficial owners and acThe electronic client verification ing Directive requires that each taken by professional accountants, countants of the entities and process means will facilitate EU member state must establish advisors and regulatory bodies, in order to stay compliant and in line trusts are responsible for and speed up clients’ accepta list with the national PEPs. with the Directive requirements. providing such information ance procedures and In addition, the EU will es-
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