The Fifth Money Laundering Directive (MLD5), which will, among other matters, amend the rules on the beneficial ownership of corporates and trusts introduced by the Fourth Money Laundering Directive (MLD4) has been agreed at European level. It is expected to be published in the Official Journal shortly. This Briefing summarises its key provisions.
NEW OBLIGED ENTITIES
Custodian wallet providers and virtual currency exchange platforms have been brought into scope, and will be required to conduct customer due diligence.
FINANCIAL INTELLIGENCE UNITS (FIUs)
FIUs will have wider powers to request, obtain and use information from any obliged entity for the purpose of preventing, detecting and effectively combating money laundering and terrorist financing.
Member States must put centralised automated mechanisms in place to allow the timely identification of those who hold or control payment accounts and bank accounts.
That information should include the names of the account-holder and any person acting on their behalf, the beneficial owner of the account-holder, the account's IBAN, the date the account was opened, and the date the account was closed.
The information in the centralised mechanism must be accessible by national FIUs (who must, in turn, be able to provide that information to other FIUs in a timely manner). National competent authorities must also be able to access that information for the purposes of complying with their obligations under MLD4 as amended by MLD5.
POLITICALLY-EXPOSED PERSONS (PEPs)
Member States will be required to issue and keep updated a list setting out what functions qualify as "prominent public functions" for the purposes of establishing who constitutes a PEP.
Each Member State must also ask each international organisation accredited in its territory to do the same. Those lists must be sent to the Commission and may be made public.
HIGH RISK THIRD COUNTRIES
When identifying high risk third countries, the Commission may also take into account the availability to competent authorities in those countries of accurate and timely information on beneficial ownership. Specific enhanced due diligence measures are also prescribed for business relationships or transactions involving high-risk third countries.
In addition to anonymous accounts and anonymous passbooks, Member States must also prohibit banks and financial institutions from keeping anonymous safe-deposit boxes.