New edition (5th) of the EU Anti-Money Laundering and terrorist financing Directive (“5AMLD”)
What is 5AMLD?
It is an upgrade of the existing EU Anti-Money Laundering and terrorist financing Directive (“AMLD”) and has been applied on a national level since January 2020.
What is new?
First of all, the 5AMLD amends the concept of “digital space” and client identification on an EU-wide level and secondly (last, but definitely not least) – tackles the anonymity of the crypto-assets/currencies and other alternative payment methods and aligns the EU cryptocurrencies and trading rules with those applicable in the US.
Another new and at first sight – irrelevant change is related to trading in works of art (yes – art!) when those amount to EUR 10 000 or more, which thereby become subject to the AMLD.
The changes and amendment to the existing framework, can be summarized as follows:
- Enhanced transparency on beneficial owners – establishing registers for companies, trust and similar structures’ owners
- Politically Exposed People – broadening the definition of people who hold “prominent public functions”
- Prepaid Cards and Remote Payments – tighter KYC prerequisites and lower thresholds for mandatory identification
- Cryptocurrencies/assets – alignment of the EU legislation with the one existing in the US and thus setting obligations like the ones valid for fiat currencies and trading to the entities involved in transactions with cryptocurrencies
- Works of art or real estate traders – parties involved in transactions valued at EUR 10 000 or more, become obliged to comply
Who is affected?
Traditional financial institutions, crypto services (exchanges, custodians, etc.) providers, art dealers and similar.
Yes, you are right – the 6th edition of the Directive is already around the corner!
It will come in December 2020 and compared to the 5AMLD, which focuses on the subjects and scope, the 6AMLD deals with the definition of crimes and the relevant penalties.
By Marian Predov.