EC announces plans to modernise AML Directive

The EC plans to bring forward a legislative proposal for a Fourth AML Directive in autumn 2012
In light of the adoption in February this year of revised international AML standards by FATF, and its own review process, a report on the application in the EU of the Third Anti-Money Laundering Directive has been adopted by the European Commission.

In a press release announcing the intent for a modern framework, the EC has said that it will give further consideration to the following issues:

* Accommodating changes to the international standards in order to incorporate more risk-based elements which should allow a more targeted and focused approach to assessing risks and applying resources to where they are most needed;

* Possible extensions of the scope of the rules, for example to ensure a more comprehensive coverage of the gambling sector, as well as the incorporation of tax crimes as a new predicate offence for money laundering;

* Possible clarification of the rules on customer due diligence – which require that banks and other obliged entities have in place adequate controls and procedures so that they know the customers with whom they are dealing and understand the nature of their business. In particular, revised rules will need to ensure that simplified procedures are not wrongly perceived as full exemptions from customer due diligence;

* Incorporating new provisions to deal with politically exposed persons (PEPs) – at a domestic level and those working for international organisations;

* Strengthening powers and cooperation between the different national Financial Intelligence Units (FIUs) whose tasks are to receive, analyse and disseminate to competent authorities reports about suspicions of money laundering or terrorist financing in order to facilitate their cooperation;

* Clarifying how AML supervisory powers apply in cross-border situations;

* Incorporating new provisions on data protection, in light of the Commission proposals published in January 2012.