The European Parliament recently voted to amend the proposed Fourth Anti-Money Laundering Directive (AML IV). In doing so, the Parliament has consolidated its work done so far on the proposal, and acknowledged that the initiative will now pass to the new European Parliament following the elections in May. This will give the new MEPs the option of not starting from scratch on the AML IV proposal.
Background
In February 2013, the European Commission published the AML IV proposal, with a view to further strengthening the EU’s defences against money laundering and terrorist financing, while also ensuring that the EU framework is aligned with the FATF standards.
ECON Report
On March 3, 2014, the European Parliament’s ECON Committee and its Committee on Civil Liberties, Justice and Home Affairs published their proposed amendments to the Commission’s proposal.
Suggested amendments included:
- Enhancing the traceability of payments by requiring companies and other legal entities such as trusts to hold and transmit to a public central register, commercial register or companies register, accurate and up-to-date information on the natural person who ultimately owns or controls the company or other entity.
- In order to better understand and mitigate risks at European level, a supranational risk analysis should be carried out by Member States to identify the risks of money laundering and terrorist financing to which the internal market is exposed. Such risk assessments should be shared with each other Member State.
- The Commission shall produce a risk assessment within one year from the date of entry into force of the proposed Directive, to be updated on a bi-annual basis. The assessment shall cover:
- The overall extent of money laundering and the areas that are greatest at risk
- The most widespread means used by criminals to launder illicit proceeds
- Recommendations to competent authorities on effective deployment of resources
- Proposals for minimum standards for risk assessments to be conducted by competent national authorities
- The preventive approach to money laundering should be targeted and proportionate (and in full compliance with existing legal principles, especially as regards EU data protection law and the protection of fundamental rights).
Next Steps
As the European Parliament has voted in favour of ECON’s proposed amendments, the Proposal will now move to trialogue negotiations under the Italian Presidency of the Council, which runs from July to December 2014.
