International Financial Law Prof Blog

Editor: William Byrnes
Texas A&M University
School of Law

Wednesday, February 18, 2015

Money Laundering: Council Endorses Agreement With EP

EU CommissionThe Council on 10 February 2015 approved an agreement with the European Parliament on strengthened rules to prevent money laundering and terrorist financing.

The directive and regulation will strengthen EU rules against money laundering and ensure consistency with the approach followed at international level. The draft regulation deals more specifically with information accompanying transfers of funds.

The Council on 10 February 2015 approved an agreement with the European Parliament on strengthened rules to prevent money laundering and terrorist financing.

The directive and regulation will strengthen EU rules against money laundering and ensure consistency with the approach followed at international level. The draft regulation deals more specifically with information accompanying transfers of funds.

Beneficial ownership 

The package includes specific provisions on the beneficial ownership of companies. Information on beneficial ownership will be stored in a central register, accessible to competent authorities, financial intelligence units and obliged entities such as banks. The agreed text also enables persons who can demonstrate a legitimate interest to access the following stored information: 

  • name,
  • month and year of birth,
  • nationality,
  • country of residence,
  • nature and approximate extent of the beneficial interest held.

Member states that so wish may use a public register. As for trusts, the central registration of beneficial ownership information will be used where the trust generates consequences as regards taxation. 

Gambling 

For gambling services posing higher risks, the agreed text requires service providers to conduct due diligence for transactions of €2000 or more. In proven low-risk circumstances, member states will be allowed to exempt certain gambling services from some or all requirements, in strictly limited and justified circumstances. Such exemptions will be subject to a specific risk assessment. Casinos will not benefit from exemptions. 

Sanctions 

As concerns sanctions, the text provides for a maximum pecuniary fine of at least twice the amount of the benefit derived from the breach or at least €1 million. For breaches involving credit or financial institutions, it provides for: 

  • a maximum pecuniary sanction of at least €5 million or 10% of the total annual turnover in the case of a legal person;
  • a maximum pecuniary sanction of at least €5 million in the case of a natural person.

Next steps

Agreement with the European Parliament was reached on 16 December 2014. The Council's approval of that outcome paves the way for adoption of the package at second reading.

Member states will have two years to transpose the directive into national law. The regulation will be directly applicable.

https://lawprofessors.typepad.com/intfinlaw/2015/02/money-laundering-council-endorses-agreement-with-ep.html

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