Europe. Agreement on 5th anti-money laundering Directive
White smoke finally came in Brussels on the evening of Friday 15th December when after nine rounds of negotiations, a deal was reached on the new EU money laundering rules.
The Council which represents the EU Member States came to an agreement with the co-legislators the European Parliament on the final senstive topics around transparency and proving legitimate interest when accessing the registers of beneficial ownership.
The agreement amends the current EU directive on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing - known as the 4th Anti-Money Laundering Directive which Members States were due to transpose by 26 June 2017 although numerous Member States have failed to do so and are facing infringement procedures from the European Commission.
Trusts have remained a contentious topic and finally the agreement includes a new ultimate beneficial owners (BO) register for trusts. The agreement includes full public access to registers with information on the ultimate beneficial owners of companies and public registers for ultimate beneficial owners of trusts but to access this, legitimate interest will need to be provided.
MEP Judith Sargentini who is a co-negotiator on behalf of the European Parliament stated "With this agreement, the EU gives a clear answer to the problems identified in the Panama Papers and Paradise Papers".
In addition to the BO register, the European Parliament pushed to get more authorities responsible for investigating their customers, which will now include sectors such as art dealers and auction houses. In addition, EU countries are obliged to make their existing land registers of real estate quickly accessible to investigative services for investigating criminal practices.
MEP Krisjanis Karins, the other co-negotiator on behalf of the European Parliament represents the EPP political group and stated that "Secrecy is cover for criminal action, which has been revealed in the Panama Papers. To eliminate the secrecy, Europe has created an ultimate beneficiary register of companies in EU countries ."