EU Strengthens Rules for Verifying Information on Funds

On 30 May 2018, new Directive of the European Parliament and of the Council 2016/0208/COD amending Directive (EU) 2015/849 on the Prevention of the Use of the Financial System for the Purposes of Money Laundering or Terrorist Financing and amending Directives 2009/138/EC and 2013/36/EU that regulate financial services markets was officially published. The new Directive, known as the Fifth Anti-Money Laundering Directive (5AMLD), becomes effective in 20 days after its publication in the Official Journal of the European Union. 

New requirements laid down in the 5AMLD have a direct impact on Ukrainian business owners that carry out commercial activities in the EU, as well as owners of the property located in the EU countries. 

Main amendments and innovations of the 5AMLD are as follows: 

Information disclosure 

  • national registers of ultimate beneficial owners of companies of member states shall be disclosed till the end of 2019; 
  • national registers of trusts and similar legal arrangements shall be disclosed for competent authorities at the beginning of 2020; 
  • enhanced requirements to operations with the third countries where the level of anti-money laundering policy is considered insufficient; 
  • credit institutions and financial institutions will terminate keeping anonymous accounts, anonymous passbooks and anonymous safe-deposit boxes; 

Widening monitoring requirements to new subjects 

  • the scope of the 5AMLD has been widened to include persons trading or acting as intermediaries in the trade of works of art (including art galleries and auction houses); 

Issues of cryptocurrencies and transactions in cryptocurrencies 

  • the scope of the 5AMLD has been widened to include virtual currencies exchange platforms and banks dealing with virtual and fiat currencies simultaneously; 
  • national financial intelligence units shall be able to obtain information allowing them to associate virtual currency addresses to the identity of the owner of virtual currency. 

It is expected that upon taking effect the 5AMLD will result in the necessity for owners of monetary funds and property located in the EU to revise their asset structuring policy. 

For further information please contact Asters' Private Clients practice partner Oleksandr Onufrienko.

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