Money laundering and terrorist financing: Council agrees its negotiating stance
The Council has agreed its negotiating stance on strengthened EU rules to prevent money laundering and terrorist financing.
On 20 December 2016, the Permanent Representatives Committee, on behalf of the Council, asked the incoming presidency to start talks with the European Parliament.
The draft directive pursues two main objectives:
- preventing the financial system being used for the funding of criminal activities;
- strengthening transparency rules to prevent the large-scale concealment of funds.
It is aimed at closing down the financial means of criminals without creating unnecessary obstacles to the functioning of payment systems and financial markets. The text amends directive 2015/849, adopted in May 2015.
Following a spate of terrorist attacks in Europe, it seeks to balance the need for increased security with the need to protect fundamental rights and economic freedoms.
The proposal is part of a Commission action plan against terrorist financing, on which the Council adopted conclusions on 12 February 2016. It also responds to the April 2016 Panama Papers revelations.
The main changes to directive 2015/849 involve:
- addressing risks linked to prepaid cards and virtual currencies. The threshold for identifying the holders of prepaid cards is lowered from €250 to €150 and customer verification requirements are extended. Virtual currency exchange platforms and custodian wallet providers will have to apply customer due diligence controls, ending the anonymity associated with such exchanges;
- improving cooperation between the member states' financial intelligence units. FIUs will have access to information in centralised bank and payment account registers, enabling them to identify account holders;
- improved checks on risky third countries. The Commission has established and regularly updates (by delegated acts) a harmonised list of non-EU countries with deficiencies in their anti-money laundering prevention regimes. Additional due diligence measures will be required for financial flows from these countries. The list mirrors that established at international level by the Financial Action Task Force;
- enhanced access to beneficial ownership registers, so as to improve transparency about the ownership of companies and trusts. The registers will also be interconnected to facilitate cooperation between member states. Public access is foreseen on the basis of a legitimate interest for all types of companies and trusts, which is an improvement on the current rules as concerns trusts that do not have a business purpose.
The directive requires a qualified majority for adoption by the Council, in agreement with the European Parliament. (Legal basis: articles 50 and 114 of the Treaty on the Functioning of the European Union.)
The member states will have 12 months to transpose the directive into their national laws and regulations. They will however have longer periods (24 or 36 months) in which to implement the various provisions on the beneficial ownership registers.