What happens if you miss the EU’s 4th Anti-Money Laundering Directive (4AMLD) deadline? For the 17 EU countries that didn’t meet the 4AMLD deadline on June 26, they received a letter from Justice commissioner Vera Jourová.
Commissioner Jourová expected the non-compliant nations to take “swift action”, as there are potential financial penalties. The letters are a first step in formal legal proceedings that can lead to the European Commission taking national governments to the European Court of Justice.
Only 11 EU countries met the deadline and established the necessary legislation: UK, France, Germany, Italy, Spain, Slovenia, Sweden, Austria, Belgium, the Czech Republic and Croatia.
So, what is the situation a few months later? In previous posts, we wrote about the requirements of 4AMLD, including compliance responsibilities, its effects on electronic identity verification (eIDV) and the changes to Due Diligence and Beneficial Ownership. Now, let’s examine the progress of specific legislation in the countries that did not meet the deadline.
On October 6, Belgium published a Law (passed Sept. 18) that “aims at transposing Directive 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (the "Fourth Directive") and to implement the FATF recommendations.”
On 2 June 2017, the Danish parliament adopted the new Danish Anti-Money Laundering (AML) Act, which takes effect from 26 June 2017.
Three-way talks with the Parliament and the Council will also continue on the review of the EU anti-money laundering Directive, where the Estonians will work hard to reach a compromise deal with the Parliament. The latter is insisting on strengthening transparency requirements for trusts and fund owners, a proposal with which Member States currently disagree.
The new Act on Detecting and Preventing Money Laundering and Terrorist Financing entered into force of 3 July 2017.
Greece has into law. Once it does that, the government will need to setup a system to handle politically exposed persons (PEPs), the registry of beneficial owners, and prepare a National Risk Assessment.
A new act on Prevention and Combating of Money Laundering and Terrorist Financing will enter into force, to implement 4AMLD, on 26 June 2017.
A draft of a law for compliance with 4AMLD was to be revealed to the public on Sept. 1, and sent to the Cabinet of Ministers on Sept. 30
On 29 June 2017 the Lithuanian Parliament adopted amendments to the Law on Prevention of Money Laundering and Terrorist Financing (the Amended Law). As of that date, the Amended Law still awaits approval by the Lithuanian President.
On August 15, a government spokesperson stated “The transposition of this AML Directive involves amendments to various financial services Acts. Malta does not have any issues with the transposition of this Directive. The Bill started to be discussed during the last Legislature. The First Reading of the Bill has already been presented in the current Legislature. The Parliamentary process to pass the Bill will be scheduled for when Parliament resumes after the summer recess.”
The Ministry of Finance announces that implementation will not be expected until the second half of 2017.
As on June 21, the Polish government published the first draft of the new Act on Combating Money Laundering and the Financing of Terrorism (Draft AML Act) which is subject to consultation with various bodies.
On 17 September 2017, Act no. 83/2017 which covers money laundering and terrorist financing, came into effect in Portugal. The act partially transposes 4AMLD.
The Government of Romania is consulting on draft laws that will transpose 4AMLD.
The Ministry of the Interior of the Slovak Republic is consulting on the preliminary proposal and opinion for a Law that will transpose 4AMLD.
While there has been progress made, there are still countries that have not fully transposed the necessary requirements. Although delays and complications in passing complex legislation is not uncommon, Commissioner Jourová is pressing for quick action: “Terrorists and criminals still find ways to finance their activities and to launder illicit gains back into the economy. The new rules as of today are crucial to closing further loopholes. I urge all Member States to put them in place without delay: lower standards in one country will weaken the fight against money laundering and terrorist financing across the EU. I also call for quick agreement on the further revisions proposed by the Commission following the "Panama Papers" to increase transparency of beneficial ownership. “
Will Commissioner Jourová have to take further ? Perhaps the warning letter will be enough to prod the remaining countries to speed up their agenda and fully transpose the 4AMLD requirements.