The Council of the EU has published a presidency compromise text setting out amendments to the draft fifth Anti-Money Laundering Directive (AMLD V) that had been proposed by the European Commission last July. The following matters arising from these amendments are noteworthy:
- When transposing the AMLD V provisions on public registries of beneficial owners, Member States should set out minimum retention periods equivalent to the period for retention of the documentation and information obtained within the application of customer due diligence measures, without, therefore, providing for a maximum retention period forcing obliged entities to destroy such records once this elapses;
- Access to the information on beneficial ownership shall be in accordance with data protection rules and may be subject to online registration and to the payment of a fee. The fee charged for obtaining the information shall not exceed the administrative costs thereof;
- Member States shall ensure that exemptions to the disclosure of beneficial ownership information are only granted upon a detailed evaluation of the exceptional nature of the circumstances;
- Member States should be allowed to identify any person, who requests information from the register;
- Member States should require that all legal arrangements governed under their law when having a structure and functions similar to trusts are treated as legal arrangements similar to trusts. By 2020, the Commission should assess whether all legal arrangements which have a structure and function similar to trusts governed under the law of Member States were duly identified and made subject to the obligations under the AMLD V;
- The Commission’s proposal for a lower beneficial ownership threshold associated with passive non-financial entities has been discarded;
- Transposition date of the AMLD V re-set back to not later than 26 June 2017; and
- Additional measures relating to professional secrecy and confidentiality obligations being made incumbent upon competent authorities and their personnel.
The compromise text has retained the Commission’s proposals for stricter requirements around prepaid cards, as well as the public disclosure of beneficial ownership information as applicable to a wider range of trusts and similar legal arrangements.
The full compromise text can be read here.
In connection with the fight against money laundering and the prevention of tax evasion and tax fraud, the Economic and Financial Affairs Council of the EU is expected to agree in the coming weeks on a general approach on a proposal for a directive that would grant access for tax authorities to information held by authorities with responsibility for AML. Access would be specifically granted to information on beneficial ownership of companies. The proposed directive is expected to apply from 1 January 2018.