The case

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The European Union Fourth Anti-Money Laundering Directive is the most sweeping AML legislation in Europe in several years. On 25 June 2015, the EU Fourth Directive was enacted, which replaces the previous Third Directive. With a two-year window for implementation, all EU member states must be compliant with the new mandates by 26 June 2017.

What do these changes entail?
• Replaces the EU Third Anti-Money Laundering Directive
• Emphasis on ultimate beneficial ownership and enhanced customer due diligence (CDD)
• Expanded definition of a politically exposed person (PEP)
• Cash payment threshold lowered to €10,000
• Expanded to included entire gambling sector beyond just casinos
• Enhanced risk-based approach, requiring evidence-based measures
• Tax crimes now within predicate offences.

Who does it impact ?
• Credit institutions;
• Financial institutions;
• Auditors, external accountants and tax advisors;
• Notaries and other independent legal professionals (under specific conditions);
• Trusts or company service providers;
• Estate agents;
• Traders in goods making or receiving payments above EUR 10,000;
• Providers of gambling services.

Source: EUR-Lex / PWC

The commentary

As regards beneficial ownership, the EU Member States are obliged under the 4th AMLD to create central registers containing information on the beneficial ownership of corporations, including Anglo-American trust structures. Whilst obliged entities pursuant to current legislation may rely on the statements of corporations and the information provided by them when taking customer due diligence measures, a central register will increase the quality of the available data used to identify the contractual party of the beneficial owner and therefore also meet the demand of the FATF for a higher level of transparency with respect to beneficial ownership. The 4th AMLD provides that the competent national authorities (such as the Financial Intelligence Units) and obliged entities have to have access to the central register under the national anti-money laundering legislation for exercising their customer due diligence. Persons and organisations capable of evidencing a ‘legitimate interest’ in this information (e.g., an interest relating to money laundering) must get access to the central register except for information regarding trust structures. The Member States, however, are entitled to restrict this access to information regarding beneficial owners completely or partially in exceptional cases.

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