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WIKI

AMLD5

SHORT DESCRIPTION

The European Union's 5th Anti-Money Laundering Directive (AMDL5) is an update of the Union's Anti-Money Laundering (AML) Framework.

IN DETAIL

The European Union's 5th Anti-Money Laundering Directive (AMDL5) is an update to the EU's Anti-Money Laundering (AML) framework. It came into force on 9 July 2018 and requires the 28 EU member states to transpose the update into national law by 10 January 2020. An EU directive is a legal framework that includes a common objective that each member state must achieve by incorporating it into its own laws. Directives are not legally binding, but non-compliance can be punished with fines. Although the deadline has passed, some member states have not yet been able to meet the requirements of AMLD5 due to the complex regulatory challenges it poses. AMLD5 has introduced new requirements for cryptocurrencies, Ultimate Beneficial Owner (UBO) registries and transaction limits for prepaid cards. This update is expected to improve the EU's anti-money laundering (AML) and counter-terrorist financing (CFT) measures by closing loopholes still exploited by financial criminals and aligning its efforts with the new FATF standards updated in June 2019 to include guidance on virtual assets and virtual asset providers. AMLD5 includes an update on obligated parties that covers fiat-to-crypto companies and custodian wallet service providers, customer due diligence for funds from high-risk third countries, UBO registration and politically exposed persons (PEP) screening.

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