The Fifth Money Laundering Directive and legal Compliance
10th of January 2020 is the date the Fifth Anti-Money Laundering Directive (5AMLD) will become law within the European Union.
5AMLD is intended to built on the 4AMLD’s attack on financial crime by boosting existing transparency rules. As a result, those working in financial services will have to meet new requirements as 5AMLD targets areas that have so far not felt the force of previous directives.
For the first time, cryptocurrencies will face regulation that was applied to more traditional financial institutions under 4AMLD. Cryptocurrency exchanges will now have to perform customer due diligence and submit suspicious activity reports (SARS).
5AMLD stretches out to one thing: know your business. The EU wants its latest directive to face the fight to money laundering.
Under 5AMLD, EU member states must establish a national register of beneficial ownership information that covers businesses, trusts and even those possessing safe-deposit boxes. The information on each member’s register should be available to share with other members and the records are required to cover anyone who has a 25% or greater stake in a company.
5AMLD also requires those in business to carry out what amounts to due diligence on countries. Failing to meet the requirements of such obligations can mean, based on the 5AMLD, fines up to a maximum of €5 million or 10% of annual turnover.
Therefore, the right controls, procedures and enhanced levels of staff awareness are essential. Not meeting those expectations would be very costly.