Common Position (EC) No 5/2001 of 30 November 2000 adopted by the Council, acting in accordance with the procedure referred to in Article 251 of the Treaty establishing the European Community, with a view to adopting a Directive of the European Parliament and of the Council amending Council Directive 91/308/EEC on prevention of the use of the financial system for the purpose of money laundering
Date: 2000-11-30
Institutions: Council of the European Union
Subjects: credit institution, fight against crime, judicial cooperation in criminal matters in the EU, money laundering, organised crime, recycling of capital

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COMMON POSITION (EC) No 5/2001

adopted by the Council on 30 November 2000

with a view to adopting Directive 2000/(cid:133)/EC of the European Parliament and of the Council of
(cid:133) amending Council Directive 91/308/EEC on prevention of the use of the financial system for
the purpose of money laundering

(2001/C 36/02)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE
EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community, and in particular Article 47(2),
first and third
sentences, and Article 95 thereof,

Having regard to the proposal from the Commission (1),

Having regard to the opinion of
Committee (2),

the Economic and Social

Acting in accordance with the procedure laid down referred to
in Article 251 of the Treaty (3),

Whereas:

(1)

(2)

is

appropriate

instruments

that Directive

91/308/EEC (4),
It
hereinafter referred to as (cid:145)the Directive(cid:146), as one of the
main international
in the fight against
money laundering, should be updated in line with the
conclusions of
the wishes
expressed by the European Parliament and the Member
States. In this way the Directive should not only reflect
best international practice in this area but should also
continue to set a high standard in protecting the
financial sector and other vulnerable activities from the
harmful effects of the proceeds of crime.

the Commission and

The General Agreement on Trade in Services (GATS)
allows Members to adopt measures necessary to protect
public morals and to adopt measures for prudential
reasons, including for ensuring the stability and integrity
of
system. Such measures should not
impose restrictions that go beyond what is necessary to
achieve those objectives.

the financial

(4)

(5)

(6)

(7)

having their head office in another Member State nor
which Member State’s authorities are responsible for
ensuring that such branches comply with the Directive.
The authorities of
the Member States in which the
branch is
located should receive such reports and
exercise the above responsibilities.

This allocation of responsibilities should be set out
clearly in the Directive by means of an amendment to
the definition of
and (cid:145)financial
institution(cid:146).

institution(cid:146)

(cid:145)credit

The European Parliament has expressed concerns that
the activities of currency exchange offices (bureaux de
change) and money transmitters
(money remittance
offices) are vulnerable to money laundering. These
activities should already fall within the scope of the
Directive. In order to dispel any doubt in this matter the
Directive should clearly confirm that these activities are
covered.

To ensure the fullest possible coverage of the financial
sector it should also be made clear that the Directive
applies to the activities of investment firms as defined in
Council Directive 93/22/EEC of 10 May 1993 on
investment services in the securities field (5).

The Directive obliges Member States only to combat the
laundering of the proceeds of drugs offences. There has
been a trend in recent years towards a much wider
definition of money laundering based on a broader
range of predicate or underlying offences, as reflected
the 40
for
Recommendations of the Financial Action Task Force
(FATF), the leading international body devoted to the
fight against money laundering.

in the 1996 revision of

example

(3)

The Directive does not establish clearly which Member
State’s authorities should receive suspicious transaction
reports from branches of credit and financial institutions

(1) OJ C 117 E, 27.6.2000, p. 14.
(2) OJ C 75, 15.3.2000, p. 22.
(3) Opinion of

the European Parliament of 5 July 2000 (not yet
published in the Official Journal), Council Common Position of 30
November 2000 and Decision of the European Parliament of (cid:133)
(not yet published in the Official Journal).

(4) OJ L 166, 28.6.1991, p. 77.

(8)

A wider range of predicate offences facilitates suspicious
transaction reporting and international cooperation in
this area. Therefore, the Directive should be brought up
to date in this respect.

(5) OJ L 141, 11.6.1993, p. 27. Directive as last amended by Directive
97/9/EC of the European Parliament and of the Council (OJ L 84,
26.3.1997, p. 22).

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(9)

(10)

In Joint Action 98/699/JHA of 3 December 1998
the
adopted by the Council on money laundering,
identification, tracing, freezing, seizing and confiscation
of instrumentalities and the proceeds from crime (1), the
Member States agreed to make all serious offences, as
defined in the Joint Action, predicate offences for the
purpose of the criminalisation of money laundering.

imposes

obligations

in
The Directive
particular the reporting of suspicious transactions.
It
would be more appropriate and in line with the
philosophy of
the action plan to combat organised
crime (2) for the prohibition of money laundering under
the Directive to be extended.

regarding

(11) On 21 December 1998 the Council adopted Joint
Action 98/733/JHA on making it a criminal offence to
participate in a criminal organisation in the Member
the European Union (3). This Joint Action
States of
reflects the Member States’ agreement on the need for a
common approach in this area.

(16) However, where a notary,

appropriate under

independent lawyer or law
firm is ascertaining the legal position of a client or
representing a client in legal proceedings, it would not
be
these
professionals under an obligation to report suspicions of
money laundering. There must be exemption from any
obligation to report information obtained either before,
during or after judicial proceedings, or in the course of
ascertaining the legal position for a client.

the Directive

to put

of

by

the

any

rights

practised

In order

(17) Directly comparable services need to be treated in the
the
same manner when
to
professionals covered by the Directive.
preserve
laid down in the European
Convention for the Protection of Human Rights and
(ECHR) and the Treaty on
Fundamental Freedoms
in the case of auditors, external
European Union,
accountants and tax advisers who,
in some Member
States, may defend or represent a client in the context
legal
judicial proceedings or ascertain a client’s
of
position,
the
in
performance of these tasks should all not be subject to
the
in accordance with the
Directive.

reporting obligations

information

obtain

they

the

(18)

(12) As required by the Directive, suspicious transaction
reports are being made by the financial sector, and
particularly by the credit institutions, in every Member
State. There is evidence that the tightening of controls
in the financial sector has prompted money launderers
to seek alternative methods for concealing the origin of
the proceeds of crime.

(13)

(14)

There is a trend towards the increased use by money
launderers of non-financial businesses. This is confirmed
by the work of
the FATF on money laundering
techniques and typologies.

(19)

The obligations of the Directive concerning customer
record keeping and the reporting of
identification,
suspicious transactions should be extended to a limited
number of activities and professions which have been
shown to be vulnerable to money laundering.

to (cid:145)the

reference

The Directive makes
authorities
responsible for combating money laundering(cid:146) to which
reports of suspicious operations must be made on the
one hand, and to authorities empowered by law or
regulation to supervise the activity of any of
the
to this Directive
institutions or persons
is
((cid:145)competent authorities(cid:146)) on the other hand.
understood that the Directive does not oblige Member
States to create such (cid:145)competent authorities(cid:146) where they
do not exist, and that bar associations and other
self-regulatory bodies for independent professionals do
not fall under the term (cid:145)competent authorities(cid:146).

subject

It

or

other

self-regulatory

case of notaries

and
independent
should be allowed,

legal
In the
professionals, Member States
in
order to take proper account of these professionals’ duty
of discretion owed to their clients, to nominate the bar
association
for
independent professionals as the body to which reports
on possible money laundering cases may be addressed
by
the
treatment of such reports and their possible onward
for
transmission
to
combating money laundering(cid:146)
the
appropriate forms of cooperation between the bar
associations or professional bodies and these authorities
should be determined by the Member States,

responsible
and in general

these professionals. The

(cid:145)authorities

governing

bodies

rules

the

(15) Notaries and independent legal professionals, as defined
by the Member States, should be made subject to the
the Directive when participating in
provisions of
financial or corporate transactions, including providing
tax advice, where there is the greatest risk of
the
services of those legal professionals being misused for
laundering the proceeds of criminal
the purpose of
activity.

(1) OJ L 333, 9.12.1998, p. 1.
(2) OJ C 251, 15.8.1997, p. 1.
(3) OJ L 351, 29.12.1998, p. 1.

HAVE ADOPTED THIS DIRECTIVE:

Article 1

Directive 91/308/EEC is amended as follows:

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1. Article 1 shall be replaced by the following:

(cid:145)Article 1

For the purpose of this Directive:

(cid:151) the acquisition, possession or use of property,
knowing, at the time of receipt, that such property
was derived from criminal activity or from an act
of participation in such activity,

(cid:151) participation in, association to commit, attempts to
commit
facilitating and
counselling the commission of any of the actions
mentioned in the foregoing indents.

and aiding,

abetting,

A.

first

(cid:147)credit institution(cid:148) means a credit institution, as defined
in Article 1(1)
subparagraph of Directive
2000/12/EC (1)
and includes branches within the
meaning of Article 1(3) of that Directive and located in
the Community, of credit institutions having their head
offices inside or outside the Community;

B.

(cid:147)financial institution(cid:148) means:

Knowledge, intent or purpose required as an element
of the abovementioned activities may be inferred from
objective factual circumstances.

Money laundering shall be regarded as such even
where the activities which generated the property to be
laundered were carried out in the territory of another
Member State or in that of a third country;

1. an undertaking other

than a credit

institution
whose principal activity is to carry out one or
more of the operations included in points 2 to 12
and point 14 of the list set out in Annex I to
Directive 2000/12/EC; these include the activities
of currency exchange offices (bureaux de change)
and of money transmission/remittance offices;

D.

E.

2. an

insurance

in
accordance with Directive 79/267/EEC (2), in so far
as it carries out activities covered by that Directive;

authorised

company

duly

3. an investment firm as defined in Article 1(2) of

Directive 93/22/EEC (3);

4. a collective investment undertaking marketing its

units or shares.

of

definition

includes
institution
financial
This
branches
financial
located in the Community of
institutions, whose head offices are inside or outside
the Community;

C.

(cid:147)money laundering(cid:148) means the following conduct when
committed intentionally:

(cid:151) the conversion or transfer of property, knowing
that such property is derived from criminal activity
or from an act of participation in such activity, for
the purpose of concealing or disguising the illicit
origin of the property or of assisting any person
who is involved in the commission of such activity
to evade the legal consequences of his action,

(cid:151) the concealment or disguise of

the true nature,
source,
rights
location, disposition, movement,
with respect to, or ownership of property, knowing
that such property is derived from criminal activity
or from an act of participation in such activity,

assets of

every kind, whether
(cid:147)property(cid:148) means
immovable,
corporeal or
tangible or
and legal documents or
instruments evidencing title to or interests in such
assets;

incorporeal, movable or
intangible,

(cid:147)criminal
involvement in the commission of a serious crime.

activity(cid:148) means

kind of

any

criminal

Serious crimes are, at least:

(cid:151) any of the offences defined in Article 3(1)(a) of the

Vienna Convention,

(cid:151) the activities of criminal organisations as defined in

Article 1 of Joint Action 98/733/JHA (4),

(cid:151) fraud, at least serious, as defined in Article 1(1) and
Article 2 of the Convention on the protection of
the European Communities’ financial interests (5),

(cid:151) corruption,

(cid:151) an

offence which may

substantial
proceeds and which is punishable by a severe
sentence of imprisonment in accordance with the
penal law of the Member State.

generate

Member States shall before (cid:133) amend the definition
provided for in this indent in order to bring this
definition into line with the definition of serious
crime of
Joint Action 98/699/JHA. The Council
invites the Commission to present before (cid:133) (6) a
proposal for a Directive amending in that respect
this Directive.

Member States may designate any other offence as a
criminal activity for the purposes of this Directive;

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F.

(cid:147)competent authorities(cid:148) means the national authorities
regulation to supervise the
empowered by law or
activity of any of the institutions or persons subject to
this Directive.

(1) OJ L 126, 26.5.2000, p. 1. Directive as amended by
Directive 2000/28/EC (OJ L 275, 27.10.2000, p. 37).
(2) OJ L 63, 13.3.1979, p. 1. Directive as last amended by
Directive 95/26/EC of the European Parliament and of
the Council (OJ L 168, 18.7.1995, p. 7).

(3) OJ L 141, 11.6.1993, p. 27. Directive as amended by
Directive 97/9/EC of the European Parliament and of
the Council (OJ L 84, 26.3.1997, p. 22).

(4) OJ L 351, 29.12.1998, p. 1.
(5) OJ C 316, 27.11.1995, p. 48.
(6) Three years form the entry into force of this amending

Directive.(cid:146)

2. The following Article 2a shall be inserted:

(cid:145)Article 2a

Member States shall ensure that the obligations laid down
in this Directive are imposed on the following institutions:

1. credit institutions as defined in point A of Article 1;

2.

financial institutions as defined in point B of Article 1,

and on the following legal or natural persons acting in the
exercise of their professional activities:

3. auditors, external accountants and tax advisors;

4.

real estate agents;

5. notaries and other

independent

legal professionals,

when they participate, whether:

(a) by assisting in the planning or execution of

transactions for their client concerning the:

(i) buying and selling of real property or business

entities;

(ii) managing of client money, securities or other

assets;

(iii) opening or management of bank, savings or

securities accounts;

(iv) organisation of contributions necessary for the
of

or management

operation

creation,
companies;

(v) creation, operation or management of trusts,

companies or similar structures;

b) or by acting on behalf of and for their client in any

financial or real estate transaction;

6. dealers in high-value goods, such as precious stones or
metals, whenever payment is made in cash, and in an
amount of EUR 15 000 or more;

7. casinos.(cid:146)

3. Article 3 shall be replaced by the following:

(cid:145)Article 3

1. Member States shall ensure that the institutions and
persons subject to this Directive require identification of
their customers by means of supporting evidence when
entering into business relations, particularly, in the case of
the institutions, when opening an account or savings
accounts, or when offering safe custody facilities.

2.
The identification requirement shall also apply for
any transaction with customers other than those referred
to in paragraph 1,
involving a sum amounting to EUR
15 000 or more, whether the transaction is carried out in
a single operation or in several operations which seem to
be linked. Where the sum is not known at the time when
the transaction is undertaken,
the institution or person
concerned shall proceed with identification as soon as it or
he is apprised of the sum and establishes that the threshold
has been reached.

By way of derogation from paragraphs 1 and 2, the
3.
identification requirements with regard to insurance
policies written by insurance undertakings within the
meaning of Directive 79/267/EEC, where they perform
activities which fall within the scope of that Directive shall
not be required where the periodic premium amount or
amounts to be paid in any given year does or do not
exceed EUR 1 000 or where a single premium is paid
amounting to EUR 2 500 or less. If the periodic premium
amount or amounts to be paid in any given year is or are
to exceed the EUR 1 000 threshold,
increased so as
identification shall be required.

4. Member States may provide that the identification
requirement is not compulsory for insurance policies in
respect of pension schemes taken out by virtue of a
contract of employment or
the insured’s occupation,
provided that such policies contain no surrender clause
and may not be used as collateral for a loan.

By way of derogation from paragraphs 1 and 2,
5.
Member States shall ensure that identification is required
either when a customer enters a casino or when a
customer pays in cash for the purchasing of gambling
chips with a value of EUR 2 500 or more, or exchanges
gambling chips for a casino cheque of such value.

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6.
In the event of doubt as to whether the customers
referred to in the above paragraphs are acting on their
own behalf, or where it is certain that they are not acting
on their own behalf, the institutions and persons subject to
this Directive shall
take reasonable measures to obtain
information as to the real identity of the persons on whose
behalf those customers are acting.

7.
The institutions and persons subject to this Directive
shall carry out such identification, even where the amount
of the transaction is lower than the threshold laid down,
wherever there is suspicion of money laundering.

(cid:145)Article 6

1. Member States shall ensure that the institutions and
persons subject to this Directive and their directors and
employees cooperate fully with the authorities responsible
for combating money laundering:

(a) by informing those authorities, on their own initiative,
of any fact which might be an indication of money
laundering;

(b) by furnishing those authorities, at their request, with
in accordance with the

all necessary information,
procedures established by the applicable legislation.

8.
The institutions and persons subject to this Directive
to the identification requirements
shall not be subject
provided for in this Article where the customer is a credit
or financial institution covered by this Directive or a credit
or financial institution situated in a third country which
in the opinion of the relevant Member States,
imposes,
to those laid down by this
equivalent
Directive.

requirements

The information referred to in paragraph 1 shall be
2.
forwarded to the authorities responsible for combating
money laundering of the Member State in whose territory
the institution or person forwarding the information is
situated. The person or persons designated by the
institutions and persons in accordance with the procedures
provided for in Article 11(1)(a) shall normally forward the
information.

regarding

transactions

9. Member States may provide that the identification
requirements
in
paragraphs 3 and 4 are fulfilled when it is established that
the payment for the transaction is to be debited from an
account opened in the customer’s name with a credit
institution subject
to this Directive according to the
requirements of paragraph 1.

referred

to

or

into

entering

business

identification
Such measures

in any case, ensure that the
10. Member States shall,
institutions and persons subject
to this Directive take
specific and adequate measures necessary to compensate
for the greater risk of money laundering which arises when
establishing
a
relations
transaction with a customer who has not been physically
((cid:147)non-face-to-face
for
present
operations(cid:148)).
the
that
ensure
customer’s identity is established, for example, by requiring
additional
supplementary
measures to verify or certify the documents supplied, or
confirmatory certification by an institution subject to this
Directive, or by requiring that the first payment of the
operations is carried out through an account opened in the
customer’s name with a credit institution subject to this
Directive. The internal control procedures laid down in
Article 11(1) shall take specific account of these measures.(cid:146)

purposes
shall

documentary

evidence,

or

In the case of

the notaries and independent

legal
3.
professionals referred to in Article 2a(5), Member States
may designate an appropriate self-regulatory body of the
profession concerned as the authority to be informed of
the facts referred to in paragraph 1(a) and in such case
lay down the appropriate forms of cooperation
shall
between that body and the authorities responsible for
combating money laundering.

legal

auditors,

shall not be obliged to apply the
Member States
laid down in paragraph 1 to notaries,
obligations
independent
external
professionals,
accountants and tax advisers with regard to information
they receive from or obtain on one of their clients, in the
course of ascertaining the legal position for their client or
performing their task of defending or representing that
client
including
advice on instituting or avoiding proceedings, whether
such information is received or obtained before, during or
after such proceedings.

in, or concerning judicial proceedings,

Information supplied to the authorities in accordance
4.
with paragraph 1 may be used only in connection with the
combating of money laundering. However, Member States
may provide that such information may also be used for
other purposes.(cid:146)

6. Article 7 shall be replaced by the following:

4.

In Articles 4, 5, 8 and 10 the terms (cid:145)credit and financial
shall be replaced by (cid:145)the institutions and
institutions(cid:146)
persons subject to this Directive(cid:146).

(cid:145)Article 7

5. Article 6 shall be replaced by the following:

Member States
the institutions and
persons subject to this Directive refrain from carrying out
transactions which they know or suspect to be related to

shall ensure that

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Official Journal of the European Communities

C 36/29

money laundering until they have apprised the authorities
referred to in Article 6. Those authorities may, under
conditions determined by their national
legislation, give
instructions not to execute the operation. Where such a
transaction is suspected of giving rise to money laundering
and where to refrain in such manner is impossible or is
likely to frustrate efforts to pursue the beneficiaries of a
suspected money-laundering operation, the institutions and
persons
authorities
immediately afterwards.(cid:146)

concerned

apprise

shall

the

7. Article 9 shall be replaced by the following:

(cid:145)Article 9

The disclosure in good faith to the authorities responsible
for combating money laundering by an institution or
person subject
to this Directive or by an employee or
director of such an institution or person of the information
referred to in Articles 6 and 7 shall not constitute a breach
of any restriction on disclosure of information imposed by
contract or by any legislative, regulatory or administrative
provision, and shall not involve the institution or person
or its directors or employees in liability of any kind.(cid:146)

8. Article 11 shall be replaced by the following:

(cid:145)Article 11

1. Member States shall ensure that the institutions and
persons subject to this Directive:

(a) establish adequate procedures of internal control and
to forestall and prevent

communication in order
operations related to money laundering;

(b) take appropriate measures so that their employees are
aware of the provisions contained in this Directive.
These measures shall
their
relevant employees in special training programmes to
help them recognise operations which may be related
to money laundering as well as to instruct them as to
how to proceed in such cases.

include participation of

Where a natural person falling within any of Article 2a(3)
to (7) undertakes his professional activities as an employee
of a legal person, the obligations in this Article shall apply
to that legal person rather than to the natural person.

2. Member States shall ensure that the institutions and
persons subject to this Directive have access to up-to-date
information on the practices of money launderers and on
indications
suspicious
transactions.(cid:146)

leading to the

recognition of

9.

In Article 12 the words (cid:145)credit or financial
institutions
referred to in Article 1(cid:146) shall be replaced by (cid:145)institutions
and persons referred to in Article 2a(cid:146).

Article 2

Within three years of the entry into force of this Directive, the
Commission shall carry out a particular examination,
in the
context of the report provided for in Article 17 of Directive
91/308/EEC, of aspects relating to the implementation of the
fifth indent of Article 1(E), the specific treatment of lawyers
and other independent legal professionals, the identification of
clients
possible
implications for electronic commerce.

non-face-to-face

transactions

and

in

Article 3

1. Member States shall bring into force the laws, regulations
and administrative provisions necessary to comply with this
Directive by (cid:133) (*) at the latest. They shall forthwith inform the
Commission thereof.

Where Member States adopt these measures, they shall contain
a reference to this Directive or shall be accompanied by such
reference on the occasion of
their official publication. The
methods of making such a reference shall be laid down by the
Member States.

2. Member States shall communicate to the Commission the
text of the main provisions of domestic law which they adopt
in the field governed by this Directive.

Article 4

This Directive shall enter
publication in the Official Journal of the European Communities.

into force on the day of

its

Article 5

This Directive is addressed to the Member States.

Done at(cid:133)

For the European Parliament

The President

For the Council

The President

(*) Eighteen months after the entry into force of the Directive.

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STATEMENT OF THE COUNCIL’S REASONS

I.

INTRODUCTION

On 20 July 1999 the Commission forwarded to the Council a proposal for a Directive amending
Council Directive 91/308/EEC on prevention of the use of the financial system for the purpose of
money laundering based on Article 47(2),
in particular the first and third sentences thereof, and
Article 95 of the EC Treaty.

The European Parliament delivered its opinion on the first reading of the proposal on 5 July 2000.
The Economic and Social Committee delivered its opinion on 26 January 2000.

On 30 November 2000, the Council adopted its Common Position pursuant to Article 251 of the
Treaty.

II. OBJECTIVE

The purpose of the proposal
is to amend the existing Directive on prevention of the use of the
financial system for the purposes of money laundering, Directive 91/308/EEC, by broadening the
prohibition of money laundering to cover not only drug trafficking but also other serious crimes and
by extending the obligations of
the Directive to certain non-financial activities and professions,
including lawyers and accountants. The proposal also aims at clarifying certain aspects of the 1991
text.

III. ANALYSIS OF THE COMMON POSITION

The changes contained in the Common Position in comparison with each Article of the Commission
proposal are set out below.

Article 1

Article 1(A) is unchanged against the Commission proposal except that the reference to the definition
of credit institution has been adapted, in this provision as everywhere in the text, to take into account
the recent codification of the banking legislation. This definition clearly includes electronic money
institutions, since Directive 2000/28/EC (1) amends the definition of credit institutions to include
electronic money institutions (2). The Common Position thus includes the substance of amendment 9
proposed by the European Parliament.

Article 1(B) enlarges the scope of the institutions covered by the Directive as compared with the
Commission proposal and even as compared with amendment 10 proposed by the European
Parliament, by including all collective investment undertakings marketing their units or shares. The
Common Position thus includes the substance of amendment 10 proposed by the European
Parliament. The Common Position does not
include amendment 11 proposed by the European
Parliament, since the Council considers it inappropriate to define supervisory authorities as financial
institutions.

Article 1(C) and (D) remain unchanged.

Article 1(E), the definition of criminal activity, has been amended to enlarge the scope proposed by
the Commission.

(1) OJ L 275, 27.10.2000, page 37.
(2)
(cid:145)Credit institution(cid:146) shall mean:
(a) an undertaking whose business is to receive deposits or other repayable funds from the public and to grant

credits for its own account; or

(b) an electronic money institution within the meaning of Directive 2000/46/EC of the European Parliament and
of the Council of 18 September 2000 on the taking up, pursuit and prudential supervision of the business of
electronic money institutions.

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Firstly, it has been made clear that criminal activity means any kind of criminal involvement in the
commission of a serious crime. This drafting aims at excluding unintentional or innocent involvement
from the scope of the Directive. The provision then defines which crimes must be considered serious
for the purposes of the Directive and finally, as proposed by the Commission, allows Member States
the option of enlarging the scope in national legislation by defining any other offence as criminal
activity for the purposes of the Directive.

Serious crimes are defined in five indents:

(cid:151) the first

is, apart
Commission and covers drug-related offences,

indent

from minor drafting changes,

the same as that proposed by the

(cid:151) the second indent covers participation in organised crime, as proposed by the Commission, but in
a more precise wording, which is based on the activities of criminal organisations as defined in
the Joint Action of 21 December 1998 on making it a criminal offence to participate in a criminal
organisation in the Member States of the European Union (98/733/JHA), adopted within the
framework of the third pillar. The Common Position thus gives a more precise definition of
the intention behind
organised crime than that proposed by the Commission, which is
amendment 12 proposed by the European Parliament. The Council has, however, not deemed it
appropriate to establish a definition of (cid:145)organised crime(cid:146)
in this Directive, adopted within the
framework of the first pillar. The Common Position thus takes account of the spirit of amendment
12 proposed by the European Parliament,

(cid:151) the third indent covers fraud (corruption is dealt with in the fourth indent, see below) as defined
in Article 1(1) and Article 2 of the Convention on the Protection of the European Communities’
Financial Interests. The wording aims at a more precise definition than that proposed by the
Commission. This text is differently drafted than the text proposed by the European Parliament in
amendment 13, but read together with the fourth indent, which covers corruption, the Common
Position is largely in line with the approach of amendment 13 proposed by the European
Parliament,

(cid:151) the fourth indent covers corruption, whether or not it is damaging to the financial interests of the
European Communities, and has been included in an explicit manner to underline the seriousness
of this offence,

(cid:151) the fifth indent aims at covering all serious offences that may generate substantial proceeds. To be
considered serious in this context an offence must be punishable by a severe sentence of
imprisonment in accordance with national penal law. The Council considered it appropriate, at
this stage, to allow Member States a certain degree of flexibility in implementing this provision
imprisonment. The Commission is,
and in evaluating what constitutes a severe sentence of
however, invited to present within three years from the entry into force, a proposal for a Directive
amending Directive 91/308/EEC in order to bring this definition into line with the definition of
serious crime set out in the Joint Action of 3 December 1998 (98/699/JHA). That definition
defines serious offences more precisely in terms of the duration of the deprivation of liberty which
can be imposed on anyone found guilty of the offence.

Article 1(F) is amended to make it clear that the object of the supervision is the activities carried out
and not the institutions and persons covered by the Directive. It is made clear in recital 18 that this
provision must not be interpreted as imposing on Member States an obligation to create any new
authorities or assign new responsibilities to existing authorities, and that bar associations and other
self-regulatory bodies for independent professionals do not fall under the term (cid:145)competent authorities(cid:146).
The Common Position therefore does not
include amendment 14 proposed by the European
Parliament.

In Article 2a the range of institutions and persons covered by the Directive has been amended:

(cid:151) in point 3 a new category,

(cid:145)tax advisers(cid:146), has been added taking into account the first part of
amendment 16 proposed by the European Parliament. The Common Position, however, maintains
the structure proposed by the Commission where the professions providing accounting and tax
advice are separated from the legal professions and therefore does not include amendment 15
proposed by the European Parliament,

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(cid:151) point 5 has been amended to cover lawyers where they participate in two functions:

(cid:151) the first function covers assisting in the planning or execution of transactions for their client
concerning a number of specified categories of activities. The specified categories are largely
identical to those proposed by the Commission, except that a new category has been added,
namely organisation of contributions necessary for the creation, operation or management of
companies,

(cid:151) the second function covers acting on behalf of and for their client in any financial or real

estate transaction.

The scope is thus narrower for the assisting and advisory function than for the acting function.
The Common Position does not exclude legal advice given in the context of legal proceedings
from the scope of the Directive. This aspect is covered in Article 6(3) where Member States have
the option of excluding information obtained in the context of legal proceedings or in the course
of ascertaining the legal position for their clients from the information obligations of the Directive
(see below). The Common Position thus does not include a part of amendment 16 proposed by
the European Parliament,

(cid:151) in point 6, which concerns dealers in high value goods, the scope has been narrowed to cover
only those cases where money laundering is most likely, in order to avoid undue administrative
burdens on dealers. It has thus been added to the text proposed by the Commission that the
obligations of the Directive apply only when dealers receive payments in cash of EUR 15 000 or
more. The Common Position thus does not include amendments 17, 18 and 19 proposed by the
European Parliament,

(cid:151) point 7 of the Commission proposal has been deleted as it was considered superfluous,

(cid:151) points 1, 2, 4 and 7 (point 8 of the Commission proposal) remain unchanged against the
Commission proposal. The Common Position does not include amendment 20 proposed by the
European Parliament, since the Council considers it inappropriate to extend the scope of the
Directive to the officials set out in amendment 20.

Article 3(1) and (2) of the Common Position, which subject all institutions and persons covered by the
Directive to the requirements in these provisions, remain unchanged against
the Commission
proposal. The Council considers that the wording of these provisions allows sufficient flexibility to
avoid undue burdens on commercial activities. For example a real estate agent will not be obliged to
require identification according to the Directive of a person who merely enquires about the possibility
of renting an apartment or a house for residential use when there is no grounds for suspicions of
money laundering. The Common Position thus does not include amendments 21 and 22 proposed by
the European Parliament.

The Annex setting out the identification requirement
for customers in non-face-to-face financial
operations and the reference thereto in the second subparagraph of Article 3(2) in the Commission
proposal have been deleted. These requirements are now set out in a new Article 3(10) (see below). In
deleting the Annex the Common Position includes amendment 33 proposed by the European
Parliament.

The Common Position does not change Article 3(3) and (4) proposed by the Commission, which are
identical to the existing 1991 Directive, and amendment 24 proposed by the European Parliament is
thus not included in the Common Position.

The provisions relating to casinos are set out in a new Article 3(5). This provision combines the
Commission proposal and amendment 25 proposed by the European Parliament. The text makes it
clear that identification is required either when a customer enters a casino or when a customer pays
in cash for the purchase of gambling chips with a value of EUR 2 500 or more or exchanges
gambling chips for a casino cheque of such a value. The Common Position thus includes the
substance of amendment 25 proposed by the European Parliament.

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Article 3(6) and (7) (Article 3(5) and (6) in the Commission proposal) remain unchanged compared to
the Commission proposal.

Article 3(8) (Article 3(7) in the Commission proposal) extends the scope of the exemption from the
identification requirement to a credit or financial institution situated in a third country which, in the
opinion of the concerned Member States, imposes requirements equivalent to those of this Directive.
The Council considers that to set out a detailed description of the requirements third countries should
impose in this respect would introduce unacceptable rigidity into the text and make it difficult to take
future developments into account. It must, however, be noted that the Council considers that the way
Member States apply this provision is a subject which could be discussed by the Contact Committee
set up by the 1991 Directive, in order to avoid any discrepancies in the application.

Article 3(9) (Article 3(8) in the Commission proposal) remains unchanged against the Commission
proposal.

to this Directive shall

The new provision in Article 3(10) replaces the requirements originally set out in the Annex to the
Commission proposal. The provision sets out the aim of the provision, namely that the institutions
and persons subject
take specific and adequate measures necessary to
compensate for the greater risk of money laundering which arises in ’non-face-to-face operations’.
Examples are given of what such measures may consist of, for example that the first payment of the
operation is carried out through an account opened in the customer’s name with a credit institution
subject to this Directive; this is also proposed by the European Parliament in amendment 23. The
Council considers that the wording of the Common Position best ensures the flexibility that is needed
and allows the authorities as well as the institutions and persons concerned to take account of future
for example electronic signatures. As
developments in the field of electronic financial services,
it is stipulated that the internal control
proposed by the European Parliament in amendment 23,
procedures laid down in Article 11(1) shall
these measures. Thus the
Common Position partly includes amendment 23 proposed by the European Parliament.

take specific account of

The Common Position includes, in slightly different words, the technical changes to Articles 4, 5, 8
and 10 proposed by the Commission. The Common Position thus does not include amendment 28
proposed by the European Parliament.

Article 6(3) has been amended in comparison with the Commission proposal. Minor changes have
been made to the wording of the first subparagraph to make the text clearer.

The scope of the second subparagraph, which sets out the option for Member States to exempt
certain professions from the information obligations of Article 6(1), has been extended. The provision
now includes auditors, external accountants and tax advisers, for the reasons set out in recital 19. The
provision also includes information received not only in the course of judicial proceedings, but also in
the course of ascertaining the legal position for a client. Finally a number of changes have been made
to the wording to make it clear that the provision concerns all aspects of judicial proceedings. The last
sentence of the second subparagraph in the Commission proposal, containing a derogation from the
option, has been deleted as proposed by the European Parliament in amendment 26. The Common
Position thus partly includes amendment 26 proposed by the European Parliament.

Article 6(4) remains unchanged against the Commission proposal, which again is unchanged against
the drafting of the last sentence of Article 6 in the existing 1991 Directive. The Common Position
thus does not include amendment 27 proposed by the European Parliament.

Articles 7 and 9 are unchanged against the Commission proposal, apart from a minor technical
change to the wording of Article 9. The Common Position therefore does not include Amendment 29
proposed by the European Parliament.

Article 11 has been amended in comparison with the Commission proposal. The range of persons and
institutions covered by the provision remains unchanged, but the Common Position adds a sentence
making it clear on whom the obligation in the first subparagraph of Article 11(1) rests. The Common
Position also includes a new paragraph 2 as proposed by the European Parliament. The Common
Position thus partly includes amendment 30 proposed by the European Parliament.

The Council has chosen to maintain Article 12 in the same form as in the 1991 Directive, introducing
only a technical amendment made necessary by the extension of the scope of the Directive. The
Council considers that matters relating to the exchange of information and cooperation between the

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Commission (OLAF) and the national authorities should not be regulated in this Directive and has
invited the Commission to present a new proposal concerning these matters. The Common Position
therefore does not include amendments 31 and 32 proposed by the European Parliament.

The recitals have been adapted following the changes made to the Commission proposal and to
conform to Guideline No 10 of the Interinstitutional Agreement of 22 December 1998 on common
guidelines for the quality of drafting of Community legislation (OJ C 73, 17.3.1999, p. 1). The recitals
include amendments 3 and 34 proposed by the European Parliament, while amendments 1, 41, 4, 5,
7, 45 and 35 have not been included.

IV. CONCLUSION

The Council considers that all the amendments made to the Commission proposal are fully in line
with the objectives of the Directive. Where the Common Position amends the Commission proposal it
has been done with a view to extending the scope of the Directive and thus rendering it more
effective, while bearing in mind the need to ensure that the individuals’ right to legal defence or
representation or ascertain one’s legal position is upheld. The Council believes that the Directive thus
amended will constitute an important weapon in the fight against money laundering.