Implementation of 3rd AML Directive
Implementation of 3rd AML Directive: There are significant differences in the way the 3rd Anti-Money Laundering Directive has been implemented within the Eurozone and the EU as a whole.
Differences relating to CDD (including BOs) include:
- Calculation of the 25% threshold for corporates;
- Categories of persons considered to otherwise exercise control over corporate entities;
- Calculation of the 25% threshold for legal entities;
- Control and ownership structure;
- Verification of identity;
- High-risk indicators and enhanced due diligence;
- Requirement to keep BO information up-to-date; and
- Use of BO information obtained for CDD purposes.
- In the case of corporate entities the definition is clarified, and further guidance on how to identify beneficial ownership is outlined in the text.
- In case of trusts and similar arrangements the settlor, trustee, protector, beneficiaries or class of beneficiaries (or similar positions) or any other person exercising control shall be regarded as a beneficial owner.
Politically Exposed Persons (PEPs)
- Members of governing bodies of political parties will also be regarded as PEPs.
- EDD will not be limited to PEPs residing in other Member States or foreign jurisdictions, but will also be applicable to domestic PEPs.
Customer Due Diligence
- Simplified Due Diligence
- No longer considered to mean “no CDD”.
- Entirely risk-based.
- Enhanced Due Diligence
- Still mandatory in specific circumstances.
- Inclusion of further specific circumstances where the application of EDD is mandatory (for example, domestic PEPs and certain complex transactions).
- Reliance on third parties
- No longer strictly rules-based.
- Introduction of group-wide reliance.