EU Will Propose New Money Laundering Legislation due to FATF Revised Recommendations

On April 11, 2012, the European Commission issued a report on the application of Directive 2005/60/EC on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing.

It calls for comments on its report.  The Report analyzes how the different elements of the existing framework have been applied and considers how the framework may need to be changed. It contains an examination of the provisions of the Directive, and in general concludes that although the existing framework appears to work well and that no fundamental shortcomings have been identified which would require substantial changes, some modifications are necessary to adapt to the evolving threats posed. The Commission plans to bring forward a proposal for a fourth anti-money laundering Directive in autumn 2012.

The Commission will give further consideration to the following issues:

  • Accommodating changes to the international standards in order to incorporate more risk-based elements which should allow a more targeted and focussed approach to assessing risks and applying resources to where they are most needed;

  • Possible extensions of the scope of the rules, for example to ensure a more comprehensive coverage of the gambling sector, as well as the incorporation of tax crimes as a new predicate offence for money laundering;

  • Possible clarification of the rules on customer due diligence – which require that banks and other obliged entities have in place adequate controls and procedures so that they know the customers with whom they are dealing and understand the nature of their business. In particular, revised rules will need to ensure that simplified procedures are not wrongly perceived as full exemptions from customer due diligence;

  • Incorporating new provisions to deal with politically exposed persons (PEPs) – at a domestic level and those working for international organisations;

  • Strengthening powers and cooperation between the different national Financial Intelligence Units (FIUs) whose tasks are to receive, analyse and disseminate to competent authorities reports about suspicions of money laundering or terrorist financing in order to facilitate their cooperation

  • Clarifying how AML supervisory powers apply in cross-border situations;

  • Incorporating new provisions on data protection, in light of the Commission proposals published in January 2012 (IP/12/46).

The report also provides an assessment of the Directive's treatment of lawyers and other independent legal professionals.

For a press release see Anti-Money Laundering: creating a modern EU framework capable of responding to new threats see http://europa.eu/rapid/pressReleasesAction.do?reference=IP/12/357&format...

 

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