Page 66 - BIPAR Annual Report 2020_EN

Anti-Money Laundering

(AML)

Background Publication & Transposition of 'On 7 May 2020, the new von der Leyen Commission business relationship. The Commission amended the
AMLD published a six-point Action Plan to further strengthen list in the form of a Delegated Regulation. It will now
the EU’s fight against money laundering and terrorist be submitted to the European Parliament and Council
The Fourth Anti-Money Laundering Directive (Directive 2015/849) Member States are due to transpose financing. The Action Plan sets out concrete measures of the EU for approval within one month. Given the
constitutes the main EU legal instrument in the prevention of use of the the Fifth AML Directive into national that the Commission will take over the next 12 months Coronavirus crisis, the Regulation listing third countries
law by 10 January 2020. In May 2020, to enforce, supervise and coordinate the EU’s rules – and therefore applying new protective measures – will
financial system for the purposes of money laundering and terrorist
the European Commission initiated on AML/CTF. It builds on the following: 1. Effective only start to apply as of 1 October 2020.
financing. It provides that “obliged entities” shall apply customer due infringement procedures in the form of implementation of existing rules, 2) a single EU rulebook,
diligence requirements when entering into a business relationship. formal notice against Belgium, Czechia, 3) a EU-level supervisor, 4) a coordination and support Finally, the Commission published a methodology to
The scope of the Directive covers, among others financial institutions, Estonia, Ireland, Greece, Luxembourg, mechanism for national Financial Intelligence Units, identify high-risk third countries that have strategic
Austria, Poland and the UK for having 5) enforcing EU-level criminal law provisions and deficiencies in their anti-money laundering and
insurance intermediaries as defined in the Insurance Mediation Directive
only partially transposed the Fifth information exchange, and 6) the EU’s global role. countering terrorist financing regimes that pose
(IMD) when they “act with respect to life insurance and other investment- AMLD. The Commission had previously significant threats to the EU’s financial system. The
related services, with the exception of a tied insurance intermediary”. in February 2020 also addressed
letters of formal notice to Cyprus,
Hungary, the Netherlands, Portugal,
In June 2018, a Directive amending the Fourth AMLD, the so-called Romania, Slovakia, Slovenia, Spain

Fifth AMLD, was published in the EU Official Journal. The Fifth AMLD and Estonia because these Member
(Directive 2018/843) complements the existing EU legal framework States had not communicated any
transposition measures. Furthermore,
by setting out additional measures to better counter the financing of
the Commission sent a reasoned
terrorism and to ensure increased transparency of financial transactions. opinion to Austria and the Netherlands

The Commission had proposed these additional AML rules in the wake of and a letter of formal notice to Czechia,
Hungary, Italy, Slovenia, Sweden,
terrorist attacks and the Panama Papers revelations in 2016 (see also our
and the United Kingdom for failing
Annual Report 2018). to completely transpose the Fourth
AMLD. The Member States concerned

In December 2018, the Council of the EU adopted an Action Plan setting have two months to respond and
take the relevant action; otherwise,
out short term non-legislative actions to better tackle AML challenges. In
the Commission may pursue the next
particular, the Council recommended that a “post-mortem” analysis of infringement steps.
recent money laundering cases in EU banks be carried out to understand

how they came about and to help shape possible additional actions.
Commission Action Plan on AML

In the context of its proposal on the ESAs Review, the European According to the European Commission,
Commission adopted targeted amendments with a view to ensuring the fight against money laundering and
terrorist financing is instrumental to Together with the Action Plan, the Commission has aim of this methodology is to provide more clarity and
that AML/CTF rules are effectively supervised across the EU and that
ensuring financial stability and security also adopted a new list of third countries with strategic transparency in the process of identifying these third
different competent authorities cooperate closely with each other. Under in Europe. Recent money laundering deficiencies in their anti-money laundering and counter- countries.
this reform, which was adopted by the EU legislators in April 2018, the scandals have revealed the need for terrorist financing frameworks. The listing does not
stricter rules at EU level. Legislative gaps entail any type of sanctions or restrictions on trade The Commission launched a public consultation on the
powers related to the prevention and mitigation of risks posed to the
occurring in one Member State have an relations, but requires obliged entities to take enhanced Action Plan to fight against money laundering and terrorist
financial sector by money laundering and terrorist financing activities impact on the EU as a whole. That is why due diligence measures on transactions involving these financing which will run until 29 July 2020. BIPAR has
are now centralised for all financial institutions at the European Banking EU rules should be implemented and countries. This includes obtaining additional information launched an internal consultation amongst its member-
Authority -EBA- (see also our Annual Report 2019). supervised efficiently in order to combat on the customer and on the beneficial owner or obtaining associations and based on the feedback collected it will
crime and protect the EU financial system. the approval of senior management for establishing a submit its contribution to the Commission.

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