The European Parliament and Council of the EU have reached political agreement on the Fourth Money-laundering Directive (AML IV).
Under the deal struck by the European law-makers, beneficial owners of companies will now have to be listed on central registers in EU countries and those registers will be accessible to any person with a legitimate interest.
This will result in greater transparency regarding business and company structures, which can be used as an effective tool for money laundering and tax evasion purposes, by obliging EU Member States to maintain central registers listing information on the ultimate beneficial owners of corporate entities and trusts, such as an individual’s name, month and year of birth, nationality, residency and details on ownership.
In addition to competent authorities and “obliged entities” such as financial institutions in conducting their due diligence obligations under anti-money laundering legislation, any person who can demonstrate a legitimate interest, such as investigative journalists or concerned citizens, will also be able to access the central registers.
Politically Exposed Persons (PEPs)
The agreement also provides that where there are high-risk business relationships with PEPs, additional measures should be put in place to establish the source of the funds involved.
The agreement must now be endorsed by EU Member States’ ambassadors (COREPER) and Parliament’s Economic and Monetary Affairs and Civil Liberties, Justice and Home Affairs committees, before being put to a vote by the full Parliament early this year.
Contributed by Stuart Connolly