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The Fourth Money Laundering Directive
The 4th ML Directive: Effective 26th June 2017
10th September 2015
After two years of debate, the Fourth Anti-Money Laundering Directive (4th ML Directive) has been finally cleared by the EU as a measure to strengthen the legal framework for Anti-Money Laundering (AML) within the EU. Now, member states must integrate the 4th ML Directive into national laws by 26th June 2017.
At that time, all regulated firms must comply with the directive’s requirements that aim to enhance the protection of the integrity, stability and reputation of the financial services sector from illicit money flows related to money laundering, organised crime and terrorist financing.
The new Money Laundering Directive will apply to an array of businesses, from banks and other financial institutions as well as accountants and auditors. In addition the rules will also have to be complied with by other businesses that are involved in making or receiving cash payments for goods worth at least €10,000, whether or not payment for them is made in a single, or in a number of linked transactions.
The 4th ML Directive confirms the Customer Due Diligence (CDD) / ‘Know-your-Customer’ (KYC) requirements and introduces certain improvements to enhance ownership transparency and deal with issues that shell companies pose in order to comply with international standards and best practices.
The new ML Directive also has provisions relating to electronically or magnetically stored money and also sets forth co-operation duties that require entities to fully and promptly co-operate with the authorities first by reporting suspicious operations and then providing relevant information.