paul@paulfoleylaw.ie
22 Northumberland Road, Ballsbridge, Dublin 4
INTRO
INSIGHTS

4/36: The EU Anti Money Laundering and Terrorist Financing Regime

ARTICLE INTRO
By
Paul Foley

INDEX

Articles 1, 3 and 5
— Money Laundering and Terrorist Financing

Articles 2 and 4
— Obliged Entities


Articles 6 to 8

— Risk Assessments

Articles 9 and 18a
— High Risk Third Countries: Prescriptive Enhanced Due Diligence

Article 10
— Anonymous Accounts, Anonymous Passbooks, Anonymous Safe Deposit Boxes

Articles 10-14
— Customer Due Diligence

Article 15 to 17
— Customer Due Diligence
Applying Simplified Due Diligence (SDD)

Article 18, 18a-to 24
— Enhanced Customer Due Diligence (EDD)

Article 24
— Shell Banks

Articles 25 to 27
— Third Parties

Article 28
— Groups

Article 30
— Beneficial Ownership Information Corporates and Other Legal Entities

Article 31
— Trusts and other types of Legal Arrangements

Article 31
— Central Beneficial Ownership Register for Trusts

Article 31a
— Implementing Acts Technical Specifications and Procedures

Article 32
— Financial Intelligence Units (FIUs) FIU Establishment and Functions

Article 32a
— Centralised Automated Mechanisms for Identifying Persons Holding or Controlling Bank Accounts and Payment Accounts


Article 33

— Co-operation by Obliged Entities and their Staff with FIUs


Article 36

— Reporting obligation on NCAs and supervisory bodies


Article 38

— Protection for Individuals who Report Suspicions


Article 39

— Prohibition on Disclosure of Information


Article 40

— Record Retention


Article 45

— Group Wide Policies and Central Contact Point for eMoney Issuers and Payment Services Providers

Article 47
— Registration of Providers of Exchange Services between Virtual Currencies and Fiat Currencies

Articles 58 to 61
— Harmonising Member States Administrative Sanctions and Measures for Breach


Article 59

— Special provision for Credit Institutions and Financial Institutions


Article 60

— Publication of Decisions to impose Administrative Sanctions or Measures


WTR

— Wire Transfer Regulation

Articles 5 & 6
— Transfer of funds within and to outside the Union


Article 4

— Obligations of the Payer PSP


Articles 7 and 8

— Obligations of the Payee PSP


Articles 10 to 13

— Obligations on the Intermediary PSP


Article 13

— Assessment and Reporting


Article 2

— Where the WTR does not apply


Article 16

— Record Retention


Articles 41 and 43 MLD4 and MLD5

— Data Protection

High Risk Third Countries - prescriptive enhanced due diligence (Article 9 and Article 18a)

The EU Commission can adopt delegated acts in accordance with Article 64 in order to identify high-risk third countries, taking into account the factors as set out in Article 9.2.

Once a country is designated by the Commission as having strategic money laundering or terrorist financing deficiencies (by way of delegated acts under Article 9(2) of MLD4), obliged entities must apply enhanced due diligence (EDD) measures to manage and mitigate the risks arising.

Article 18a sets out a prescriptive list of EDD measures that must be applied by obliged entities in relation to business relationships or transactions involving high-risk third countries.  These include:

Article 18(a)(1) obtaining additional information on, the customer and on the beneficial owner(s); on the intended nature of the business relationship; the source of funds and source of wealth of the customer and of the beneficial owner(s); the reasons for the intended or performed transactions and furthermore obtain the approval of senior management for establishing or continuing the business relationship.

Article 18a(2) requires Member States to impose on obliged entities one or more additional measures as applicable with regard to high risk third countries (not reproduced here). 

Article 18a(3) additionally provides, that Member States  must apply, where applicable, one or several measures with regard to high-risk third countries identified pursuant to Article 9(2). Three of the five measures are:

(a) refusing the establishment of subsidiaries or branches or representative offices of obliged entities from the country concerned, or otherwise,

(b) prohibiting obliged entities from establishing branches or representative offices in the country concerned, or otherwise,  

(e) requiring credit and financial institutions to review and amend, or if necessary terminate, correspondent relationships with respondent institutions in the country concerned.


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