European Commission: Approval Of New Directive Will Boost Fight Against Money Laundering And Terrorist Financing

The European Commission has welcomed the European Parliament’s approval of the proposed Third Directive on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing. The Directive applies to the financial and other key services sectors and also covers all providers of goods, when payments are made in cash in excess of €15.000. Those subject to the Directive must cooperate in the fight against money laundering by taking various measures to establish customers’ identities, report suspicions and set up preventive systems within their organisations. Final adoption of the Directive is expected at the ECOFIN Council of 7 June in Luxembourg.

Internal Market and Services Commissioner Charlie McCreevy said: “The fight against money laundering and terrorist financing is a political priority for the EU. Intense cooperation between the European Parliament, the Council and the Commission has paved the way for a swift adoption of state-of-the art defences in the EU against money laundering and terrorist financing. Not only will the fight against money laundering and terrorist financing benefit from this, but also the integrity and stability of the financial sector The EU is setting an example to be followed and matched.”

The Third Anti-Money Laundering Directive builds on existing EU legislation (see IP/04/832) and incorporates into EU law the June 2003 revision of the Forty Recommendations of the Financial Action Task Force (FATF), the international standard setter in the fight against money laundering and terrorist financing.

The Directive is applicable to the financial sector as well as lawyers, notaries, accountants, real estate agents, casinos, trust and company service providers. Its scope also encompasses all providers of goods, when payments are made in cash in excess of €15.000. Those subject to the Directive need to:

identify and verify the identity of their customer and of its beneficial owner, and to monitor their business relationship with the customer;
report suspicions of money laundering or terrorist financing to the public authorities -usually, the national financial intelligence unit; and
take supporting measures, such as ensuring a proper training of the personnel and the establishment of appropriate internal preventive policies and procedures.

The Directive introduces additional requirements and safeguards for situations of higher risk (e.g. trading with correspondent banks situated outside the EU).

For the sake of clarity, the existing 1991 Directive, as amended in 2001, will be repealed and replaced by this Directive, upon its effective entry into force.

For further information see:

http://www.europa.eu.int/comm/internal_market/company/financial-crime/index_en.htm