On the 20th July 2021 the European Commission published a proposal for a Regulation on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing. A number of changes of substance are made to the current framework encompassed in the 5th AML Directive in order to bring about a greater level of harmonisation and convergence in the application of AML/CFT rules, notably: the expansion of the list of obliged entities to include crypto-asset service providers but also other sectors such as crowdfunding platforms and migration operators in order to mitigate new and emerging risks, clarification of requirements in relation to internal policies, controls and procedures including in the case of groups, and customer due diligence measures are made more granular, with clearer requirements according to the risk level of the customer in order to ensure consistent application of rules across the internal market and a review of requirements in relation to third countries to ensure that enhanced due diligence measures are applied to those countries that pose a threat to the Union’s financial system.
It further includes requirements in relation to politically exposed persons who are subject to minor clarifications, particularly as regards the definition of a politically exposed person. Beneficial ownership requirements are further streamlined to ensure an adequate level of transparency across the Union, new requirements are introduced in relation to nominees and foreign entities, red flags raising suspicion are clarified, requirements for the processing of certain categories of personal data are introduced and measures to mitigate the misuse of bearer instruments are strengthened.
These changes will not only promote convergence of application of AML/CFT measures across Member States, but will also in the European Commission views provide a consistent framework against which AMLA will be able to monitor the application of such rules in its function as a direct supervisor of certain obliged entities.
