A closer look: EU-wide – Tighter AML controls imposed by Europe’s Fifth Anti-Money Laundering Directive

Hot on the heels of the Fourth Anti-Money Laundering Directive (4MLD), which Member States had to implement by June last year, we now have the next instalment – the Fifth Anti-Money Laundering Directive (5MLD), which came into force on 9 July 2018 and must be implemented by Member States (and the UK probably depending on the terms of any Brexit transition period) by 10 January 2020. The changes will impose additional obligations particularly on those in the financial services sector.

5MLD amends 4MLD, and includes some lessons learnt from the Paris and Brussels terrorist attacks and the Panama Papers, plus technological innovation. Key changes include:

·Catching up with new technologies: Custodian wallet providers and virtual currency exchange platforms will fall within the scope of AML laws, as they have been added as new ‘obliged entities’ (OE). 5MLD also allows the use of electronic identification for customer due diligence.

·Improving enforcement: There will be

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