position of the Council on the adoption of a Directive of the European Parliament and of the Council on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT pursuant to Article 294(6) of the Treaty on the Functioning of the European Union concerning the

2013/0025 (COD)

COMMUNICATION FROM THE COMMISSION

TO THE EUROPEAN PARLIAMENT



pursuant to Article 294(6) of the Treaty on the Functioning of the European Union



concerning the

position of the Council on the adoption of a Directive of the European Parliament and of the Council on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing

(Text with EEA relevance)

1.Background

Date of transmission of the proposal to the European Parliament and to the Council

(document COM(2013) 45 final – 2013/0025 COD): 6 February 2013. Date of the opinion of the European Economic and Social Committee: 23 May 2013. Date of the position of the European Parliament, first reading: 11 March 2014. Date of transmission of the amended proposal: N/A. Date of adoption of the position of the Council: 20 April 2015.

2.Objective of the proposal from the Commission

The main objectives of the proposal to revise Directive 2005/60/EC of 26 October 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing are:

–to strengthen the Internal Market by reducing complexity across borders, safeguarding the interests of society from criminality and terrorist acts, contributing to the financial stability by means of protecting the soundness, proper functioning and integrity of the financial system, and safeguarding the economic prosperity of the European Union by means of ensuring an efficient business environment, and

–to be aligned, where appropriate, with the International standards on combating money laundering and the financing of terrorism adopted by the Financial Action Task Force (FATF) in February 2012.

It requires Member States, supervisory authorities and obliged entities to assess risk and take adequate mitigating measures commensurate to such risk.

In parallel, the Commission, after undertaking a review of the EU framework, also proposed a revision of Regulation (EC) No 1781/2006 on information on the payer accompanying transfers of funds, taking into account the updated recommendations on wire transfers adopted by the FATF.

3.Comments on the position of the Council

The position of the Council reflects the political agreement reached between the European Parliament and the Council on 16 December 2014 and includes elements proposed by both institutions. The Commission supports this agreement.

The Commission can accept the additional elements introduced in the position of the Council, in particular that:

all gambling service providers, not only casinos, are required to apply customer due diligence measures for single transactions of EUR 2000 or more. In strictly limited and justified circumstances and on the basis of a proven low risk of money laundering or terrorist financing, Member States will be allowed to provide for some exemptions.

the provision on the definition of beneficial ownership constitutes a well-balanced result which will allow an overall understanding of what beneficial ownership means;

considering the need for consistency of the EU framework applicable to cash, the Commission supports that the threshold applying to natural or legal persons trading in goods or services is raised from EUR 7 500 to EUR 10 000;

the removal of the distinction between “foreign” and “domestic” politically exposed persons (PEPs), resulting in automatic enhanced due diligence measures to be required in the case of any PEP, regardless of where they originate from, represents a fair balance between the Council's concerns, the European Parliament's reservations and existing recommendations by FATF; and