REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the application of Directive 2005/60/EC on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing
Date: 2012-04-11
Institutions: European Commission
Subjects: disclosure of information, financial legislation, financing, lawyer, money laundering, share capital, terrorism

EUROPEAN COMMISSION 

Brussels, 11.4.2012  
COM(2012) 168 final 

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND 
THE COUNCIL 

on the application of Directive 2005/60/EC on the prevention of the use of the financial 
system for the purpose of money laundering and terrorist financing 

(Text with EEA relevance) 

 
 
 
 
  
 
REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND 
THE COUNCIL 

on the application of Directive 2005/60/EC on the prevention of the use of the financial 
system for the purpose of money laundering and terrorist financing 

(Text with EEA relevance) 

1. 

INTRODUCTION 

Directive  2005/60/EC  (hereinafter  referred  to  as  the  Third  AMLD)  sets  out  the  framework 
designed  to  protect  the  soundness,  integrity  and  stability  of  credit  and  financial  institutions 
(FIs) and confidence in the financial system as a whole, against the risks of money laundering 
(ML) and terrorist financing (TF). The EU rules are to a large extent based on international 
standards adopted by the Financial Action Task Force (FATF) and, as the Directive follows a 
minimum harmonisation approach, the framework is completed by rules adopted at national 
level1. 

The  FATF  has  undertaken  a  fundamental  review  of  the  international  standards,  which 
culminated in the adoption of a new set of recommendations in February 20122. In parallel to 
the international process, the European Commission has been undertaking its own review of 
the  European  framework.  This  review  has  comprised  an  external  study  published  by  the 
Commission on the application of the Third AMLD (hereafter the Deloitte study)3, extensive 
contacts and consultations with private stakeholders and civil society organisations4 , as well 
as with representatives of EU Member State regulatory and supervisory authorities.  

The  Third  AMLD  tasked  the  Commission  with  presenting  an  implementation  report  to  the 
European Parliament and Council, including specific examination of the treatment of lawyers 
and  other  independent  legal  professionals  (Article  42).  Another  report  was  requested  on  the 
threshold percentages with respect to the identification of beneficial owners (Article 43).  

The purpose of this report is threefold: 

1. 

2. 

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2 
3

4 

to provide feedback from the Commission's review process on how the Directive has 
been applied;  

to fulfil the obligations set out in Articles 42 and 43 of the Third AMLD;  

The Directive is part of a broader set of legislative measures aimed at the prevention of money laundering and terrorist financing, 
including Regulation 1781/2006 (information on the payer accompanying transfers of funds), Regulation 1889/ 2005 on controls 
of  cash  entering  or  leaving  the  Community,  Council  Decision  2000/642  concerning  arrangements  for  cooperation  between 
financial  intelligence  units of  the  Member  States  in  respect  of  exchanging  information,  as  well  as EU  legal  instruments  on  the 
freezing of assets. 
http://www.fatf-gafi.org/dataoecd/49/29/49684543.pdf 
Final  Study 
http://ec.europa.eu/internal_market/company/docs/financial-crime/20110124_study_amld_en.pdf 
In addition, 2 private sector stakeholder meetings were organised in 2011.  

the  Anti-Money  Laundering  Directive,  Deloitte,  December 

the  Application 

2010, 

on 

of 

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3. 

to  consider  the  need  for  possible  changes  to  the  framework  in  light  of  both  the 
Commission's own findings as well as the newly adopted international standards.  

Following the adoption of this report, the Commission invites all interested stakeholders, to 
provide  it  with  their  feedback.  The  Commission  intends  to  proceed  with  preparation  of 
legislative texts with a view to adoption in autumn 2012. 

2. 

APPLICATION OF THE DIRECTIVE 

This report has been structured along a number of identified key themes, which are central to 
the Third AMLD’s objectives. Under each theme, consideration is given to how the existing 
rules  have  been  applied,  which  factors  may  drive  changes  (in  particular  resulting  from  the 
international  revision  process),  and  what  might  be  the  possible  options  for  changing  the 
existing EU rules. In addition to the thematic review, there is a specific analysis devoted to 
the  issues  identified  in  Articles  42  and  43  of  the  Directive.  Finally,  the  annex  to  this  report 
addresses a closely related matter, namely cross-border wire transfers.  

2.1. 

Applying a risk-based approach (RBA) 

A risk-based approach enables a more targeted and focussed approach to assessing risks and 
applying  resources  to  where  they  are  most  needed.  The  existing  EU  framework  already 
contains  elements  which  allow  an  RBA  to  be  applied  both  by  Member  States,  authorities 
involved  in  supervision,  and  by  the  institutions  and  persons  responsible  for  applying 
AML/CFT rules (hereinafter referred to as "obliged entities").  

The Directive leaves room for countries to design their own RBA and to decide on the degree 
of  risk-based  measures  that  may  be  applied  by  obliged  entities.  The  Deloitte  study  reported 
that a wide diversity of national measures can complicate cross-border compliance, and that 
there is a lack of practical guidance available.  

The new FATF standards broaden the application of the RBA. At national level, countries are 
obliged  to  identify,  assess  and  understand  ML/TF  risks,  and  to  apply  resources  to  mitigate 
those risks.  Countries need to ensure that higher  risks  are  identified  and  mitigated,  but  may 
permit simplified measures for certain requirements when lower risk has been identified. The 
FATF acknowledges that AML/CFT risk assessments at a supranational level should be taken 
into account. The FATF also recognises that supervisors should apply a risk-based approach 
to  supervision,  based  on  their  understanding  of  the  ML/FT  risks  present  in  the  country  and 
within  the  entities  they  supervise.  The  FATF  requires  obliged  entities  to  assess  risks  for 
customers, countries/geographic areas and product/services/transactions/delivery channels.  

Consideration  could  be  given  to  incorporating  the  following  elements  of  the  risk-based 
approach in the forthcoming revision of the Directive:  

• 

• 

National/supranational  risk  assessments:  introducing  obligations  for  Member 
States  to  conduct  and  update  risk  assessments,  in  line  with  the  new  FATF 
recommendations. A common approach between Member States might be considered 
in  order  to  facilitate  better  coordination  and  more  consistency,  as  well  as  the 
development of a supranational approach to risk assessments, where appropriate.  

RBA to supervision: the use of an RBA to supervision could be given more detailed 
recognition in the EU framework, including the need for supervisors to be aware of 

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the risks faced by the entities they supervise. This might include provision of sectoral 
guidance. For example the AMLC5 could be commissioned to provide guidance on 
issues affecting financial sector supervision. 

• 

RBA applied by FIs  and  Designated Non Financial Businesses  and Professions 
(DNFBPs): explicitly introducing a requirement that risk-based procedures designed 
by obliged entities are appropriate to the size and nature of the entity, and have to be 
documented, updated and available to competent authorities.  

2.2. 

Criminalisation of ML/TF 

The  current  approach  towards  criminalisation  at  EU  level  is  based  on  Framework  Decision 
2001/500  of  26  June  20016,  a  former  third  pillar  legal  instrument.  The  1990  Council  of 
Europe  Convention  on  Laundering,  Search,  Seizure  and  Confiscation  of  the  Proceeds  from 
Crime  and  on  the  Financing  of  Terrorism  (updated  in  2005)7  also  specifies  ML  and  TF 
offences.  

Article  1.1  of  the  Third  AMLD  requires  Member  States  to  ensure  that  ML  and  TF  are 
prohibited. Criminalisation of these offences, a key requirement of the FATF standards, has 
largely been left to Member States to introduce via their legal systems.  

Criminalisation  at  EU  level  could  be  envisaged.  However,  a  revision  of  the  Third  AMLD, 
based  on  Article  114  of  the  Treaty,  would  not  provide  a  suitable  legal  basis  for  such  a 
criminalisation of ML/TF. Consideration could therefore be given to introducing an obligation 
for Member States to criminalise ML and TF in a specific instrument based on Article 83(1) 
TFEU, which was introduced by the Lisbon Treaty.  

2.3. 

Scope 

2.3.1. 

Serious crimes 

The offence of money laundering (Article 1(2)) is committed when the proceeds of “criminal 
activity” are laundered. Article 3(5) sets out a range of “serious crimes” that are considered to 
be criminal activities. Beyond the listed offences, the Directive takes a general approach with 
respect to all other offences which carry a punishment of imprisonment based on a mixture of 
maximum and minimum thresholds8.  

The  new  FATF  standards  have  included  “tax  crimes  (related  to  direct  taxes  and  indirect 
taxes)” as a predicate offence, but the FATF does not provide further guidance as to how this 
should apply.  

Consideration could therefore be given to: 

• 

5

6 
7 
8 

Whether  the  existing  "all  serious  crimes"  approach  remains  sufficient  to  cover  tax 
crimes; 

The Joint Committee of the  European Supervisory Authorities´ Sub Committee on Anti Money Laundering (AML Committee, 
AMLC) assists the European Supervisory Authorities in a supervisory capacity, to ensure a consistent implementation of the EU 
law. 
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2005:068:0049:0051:en:PDF 
http://conventions.coe.int/Treaty/EN/Treaties/html/198.htm 
Article 3(5)(f) 

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• 

• 

Whether  tax  crimes  should  be  included  as  a  specific  category  of  "serious  crimes" 
under Article 3(5); and/or  

Whether further definition of tax crimes is required.  

2.3.2.  Broadening the scope beyond the existing obliged entities 

(a) 

(b) 

(c) 

(d) 

(e) 

The  gambling  sector:  The  Third  AMLD  includes  “casinos”  within  its  scope,  but 
without providing any definition. The Directive also covers activities “performed on 
the  Internet”  (recital  14),  thus  also  covering  on-line  casinos.  Consultations  have 
indicated  general  support  in  favour  of  a  broader  definition  of  gambling  in  the 
Directive,  but  with  the  precise  scope  to  be  determined  on  a  risk-based  basis  at 
national level. Consideration could be given to capturing gambling activities which 
pose higher AML/CFT risks, while avoiding the imposition of an excessive burden 
on lower risk activities.  

The Commission services are planning to adopt an action plan on on-line gambling 
in 2012 , and it will therefore be appropriate to ensure a consistent approach between 
any initiatives proposed to tackle money laundering in this sector and the revisions to 
the Third AMLD.  

Other  types  of  financial  agent:  Over  the  course  of  consultations  with  Member 
States, some respondents suggested that the scope of the Directive be extended to all 
agents  operating  on  behalf  of  FIs.  Some  suggested  that  there  may  be  AML  risks 
linked to the activities of financial agents. Consideration could be given to reflecting 
the role of agents either in their own right or within the obligations applied to FIs, in 
particular  where  they  provide  cross-border  financial  services  (this  issue  is  further 
addressed under Section 2.10 – supervision).  

National  central  banks:  During  consultations, 
that 
consideration should be given to explicitly applying the Directive to Central Banks 
by  extending  it  in  a  way  which  takes  into  consideration  the  specificities  of  their 
operations, supervision, and the necessity of safeguarding their independence.  

it  has  been  suggested 

Real Estate/Letting agents: Article 2(1)(3)(d) includes real estate agents in the scope 
of the Directive but does not define their activities. With respect to the activities of 
letting agents, there is evidence to suggest that this sector is also vulnerable to money 
laundering. The revised FATF standards are silent on this issue. During consultations 
with Member States, a suggestion was made to consider whether the Directive should 
apply explicitly to letting agents.  

Dealers  in  precious  stones  and  metals:  The  general  clause  in  Article  2(1)(3)(e) 
covering  “any  natural  or  legal  person  trading  in  goods,  only  to  the  extent  that 
payments are made in cash in an amount of EUR 15 000 or more” covers dealers in 
precious  stones  and  metals.  There  is  also  specific  reference  to  them  in  Recital  18. 
The  Commission  has  been  made  aware  of  concerns  from  some  private  sector 
stakeholders  that  criminals  are  taking  advantage  of  the  absence  of  Customer  Due 
Diligence  (CDD)  in  some  Member  States  to  launder  the  proceeds  of  crime  in  this 
sector.  

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Consideration  could  be  given  to  whether  measures  might  be  needed  to  address  the 
specific ML/TF risks in this sector.  

(f) 

Exemptions: Article 2(2) of the Directive allows Member States to decide that legal 
and  natural  persons  who  engage  in  a  financial  activity  on  an  occasional  or  very 
limited basis and where there is little risk of money laundering or terrorist financing 
occurring can be exempted from its scope. The revised FATF standards stipulate that 
transferring of money or value cannot benefit from such an exemption.  

Consideration  could  be  given  to  amending  the  Directive  to  take  account  of  this 
revision. 

2.4. 

Customer due diligence 

The Third AMLD sets out requirements for customer due diligence ("CDD") on three levels: 
regular CDD, enhanced CDD ("EDD") and simplified CDD ("SDD"). Regular CDD imposes 
a duty on the obliged entity to identify and verify their customers and customers' beneficial 
owners,  to  understand  the  nature  of  the  business  relationship  as  well  as  to  conduct  ongoing 
monitoring. In the case of EDD, the obliged entity must take a number of prescribed further 
steps,  albeit  on  a  risk  sensitive  basis.  SDD  permits  obliged  entities  to  perform  reduced 
customer due diligence measures for certain types of customer or business.  

Regular  CDD:  the  Deloitte  study  concluded that  the  main  divergences  in  the  application  of 
the  Directive  concern  the  threshold  established  to  require  CDD  measures  for  occasional 
transactions.  Respondents  to  the  Commission’s  review  process  have  requested  a  number  of 
clarifications to the existing rules. Consideration could be given to: 

• 

• 

• 

• 

Reducing the €15,000 threshold in Article 7(b)  in respect of occasional transactions; 

Reducing the €1,000 threshold for electroni c fund transfers in Regulation 1781/2006; 

Harmonising  the  approach  to  identification  and/or  compiling  a  list  of  EU-wide 
recognised  identity  documents  issued  by  Member  States  in  order  to  facilitate 
customer identification/verification; 

Clarifying the obligations on both parties for third party reliance. 

Enhanced  CDD:  a  number  of  stakeholders  have  suggested  that  a  more  flexible  approach 
could be applied as to when and which EDD measures need to be applied commensurate to 
the  risks  that  are  being  addressed.  For  example,  some  Member  States  have  asked  for  re-
consideration of the approach whereby non face-to-face situations are automatically classed as 
high  risk,  and  to  ensure  that  the  Directive  appropriately  takes  account  of  new  payment 
methods/new technologies. Consideration could be given to an approach which incorporates 
the FATF revisions, looking at types of factors that ought to be considered (e.g. customer risk, 
geographical  risk  and  product,  service  or  delivery  channel  risk  factors),  whilst  recognising 
that risk is variable and the factors should not be considered in isolation. 

Simplified  Due  Diligence:  the  EU  framework  provides  that  certain  types  of  customer  or 
product that present a lower risk of ML may be subject to an exemption from normal CDD 
requirements,  although  obliged  entities  are  still  required  to  conduct  ongoing  monitoring  to 
detect  unusual  transactions.  This  approach  has  been  criticised  in  some  FATF  Mutual 

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Evaluation  reports  as,  allegedly,  constituting  an  absolute  exemption  rather  than  a  simplified 
regime. A study carried out by the AMLC on SDD has found differences regarding the way it 
is applied in the different Member States. While some Member States grant their institutions a 
full  exemption  from  CDD,  others  require  them  to  demonstrate  a  minimum  level  of  CDD 
measures.  

The FATF standards permit countries to allow FIs to apply SDD measures “where the risks of 
money laundering or terrorist financing are lower…and provided there has been an adequate 
analysis of the risk by the country or by the financial institution.” The standards set out factors 
and examples of lower risk situations.  

Consideration could be given to:  

• 

• 

• 

• 

• 

Clarifying that SDD is not a full exemption from CDD; 

Whether  the  Directive  should  set  out  the  risk  factors  that  need  to  be  taken  into 
consideration when determining if SDD is appropriate, or whether it should provide 
specific examples of when SDD might apply;  

Whether  further  guidance  on  risk  factors  should  be  elaborated  (for  example  by  the 
AMLC in the case of the financial sector);  

Whether  to  specify  (either  in  the  Directive  or  via  guidance)  a  minimum  set  of 
measures that have to be taken by the obliged entities in SDD situations;  

Introducing, in line with the new FATF standards, a risk-based approach with respect 
to whether or not to apply SDD when opening a business relationship with another FI 
licensed in the EU or treated as an equivalent third country.  

2.5. 

Politically Exposed Persons (PEPs)  

The  Third  AMLD  defines  “politically  exposed  persons”  as  natural  persons  who  are  or  have 
been  entrusted  with  prominent  public  functions  and  immediate  family  members,  or  persons 
known to be close associates, of such persons. Obliged entities are required to apply enhanced 
customer due diligence measures in respect of PEPs residing in another Member State or in a 
third country.  

The FATF standards have introduced risk-based requirements for domestic PEPs, so that the 
new  standards  will  apply  different  levels  of  obligation  in  respect  of  foreign  and  domestic 
PEPs, both as customers and beneficial owners of customers. According to FATF, PEPs are 
persons  who  have  been  entrusted  with  prominent  public  functions  by  foreign  countries  or 
domestically  or  by  an  international  organisation.  The  requirements  for  foreign  PEPs  do  not 
involve  a  residency  requirement.  The  FATF  has  also  introduced  specific  requirements  to 
ascertain whether the beneficiary of a life insurance policy is a PEP.  

Some stakeholders responding to the Deloitte survey considered that the definition of PEP is 
too  broad.  Difficulties  have  been  reported  relating  in  particular  to  the  wide  definition  of 
family members and close associates. There are also issues related to the availability, cost and 
accuracy  of  information  available  from  databases,  as  well  as  uncertainties  as  to  how  long  a 
person needs to be in public function before he becomes a PEP, and whether the Directive's 
provision that a person ceases to be a PEP one year after leaving office adequately addresses 

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the  risk  they  potentially  pose.  In  addition,  there  is  some  uncertainty  as  to  whether  the 
reference  in  the  recital  to  the  Directive  that  senior  management  approval  includes  “the 
immediate higher level of the hierarchy of the person seeking such approval” is sufficient, as 
this could entail a relatively junior member of staff. 

There is also a recurrent claim from private stakeholders for supporting measures which might 
address  the  availability,  reliability  and  cost  of  data  available  to  obliged  institutions  on 
names/categories  of  PEPs,  and  the  data  protection  considerations  arising  therefrom.  The 
feasibility and appropriateness of such measures would have to be carefully assessed.  

Consideration could be given to clarifying the Third AMLD and the implementing Directive9 
in order to take account of the FATF changes, e.g. by: 

• 

• 

• 

• 

• 

Incorporating the new FATF provisions for domestic PEPs and PEPs in international 
organisations; 

Removing the residence criteria; 

Including provisions relating to life insurance; 

Clarifying  that  a  risk-based  approach  should  be  applied  to  PEPs  even  beyond  one 
year after they have left office; 

Clarifying the definition of “senior management”. 

2.6. 

Beneficial ownership 

This  section  takes  the  analysis  beyond  the  issue  of  a  threshold,  and  undertakes  a  broader 
examination of the other issues related to beneficial ownership in the Third AMLD.  

2.6.1.  The 25% beneficial ownership threshold  

Article 43 of the Third AMLD requires the Commission to present a report to the European 
Parliament  and  the  Council  on  the  threshold  percentages  in  Article  3(6),  “paying  particular 
attention  to  the  possible  expediency  and  consequences  of  a  reduction  of  the  percentage  in 
points (a)(i), (b)(i) and (b)(iii) of Article 3(6) from 25% to 20%.” 

Article  3(6)  of  the  Third  AMLD  defines  “beneficial  owner”  as  the  natural  person(s)  who 
ultimately  owns  or  controls  the  customer  and/or  the  natural  person  on  whose  behalf  a 
transaction  or  activity  is  being  conducted.  Further  clarification  is  provided  on  minimum 
requirements in case of corporate entities and in case of other legal entities and arrangements 
which administer and distribute funds. When the Third AMLD was agreed, a 25% threshold 
of ownership or voting rights or, in the case of administered funds, the beneficiary of 25% or 
more  of  the  property,  was  deemed  to  be  a  sufficient  threshold  to  regard  a  person  as  a 
“beneficial owner”, for AML/CFT purposes.  

The  Deloitte  study  concluded,  on  the  basis  of  its  survey  of  stakeholders  and  Member  State 
authorities,  that  there  were  a  significant  number  of  stakeholders  who  would  not  favour 
lowering  the  threshold.  It  was  felt  that  lowering  the  threshold  would  not  bring  significant 

9

Commission Directive 2006/70/EC 

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advantages  but  would  increase  cost  of  compliance  and  administrative  burden.  The 
Commission has not received any further evidence of the need to modify the threshold. 

The  Commission  will  carefully  consider  whether  it  is  appropriate  to  modify  the  25% 
thresholds. 

2.6.2.  Beneficial ownership – implementation issues 

The  AMLC10  has  found  that  the  way  in  which  Member  States  determine  how  the  threshold 
should  be  calculated  differs.  Certain  Member  States  consider  that  the  ultimate  beneficial 
owner (“UBO”) is the person(s) who owns/controls at least 25% of the customer, whilst other 
Member  States  interpret  the  UBO  as  the  person(s)  that  owns/controls  at  least  25%  of  the 
customer, or of any entity that owns at least 25% of the customer.  

Other  aspects  of  the  definition  give  rise  to  uncertainties  or  different  interpretations  by 
Member  States,  in  particular  what  “otherwise  exercising  control  over  the  corporate  entity” 
means in Article 3. These differences may pose difficulties and increase costs at group level 
when  designing  customer  identification  procedures  and  assessing  customer  risk.  They  may 
also  affect  the  level  playing  field  for  FIs  and  DNFBPs  across  Member  States.  Effective 
implementation has also been hindered by uncertainty amongst private sector stakeholders as 
to the concept of “adequate” measures.  

The  revisions  to  the  FATF  standards  set  out  an  approach  for  identifying  and  verifying 
beneficial  ownership,  with  measures  aimed  at  finding  a  natural  person  with  a  controlling 
ownership  interest,  or  (if  none  can  be  found  or  if  there  are  doubts  that  the  person  with  the 
controlling  ownership  interest  is  the  beneficial  owner)  the  natural  person  exercising  control 
through other means. If the above steps result in no natural person being identified, then the 
identity of a natural person holding the position of senior manager should be identified. There 
has been broad support amongst Member States to following this approach, although there is 
general agreement that the final option (identification of a senior manager) should not be seen 
as a way of circumventing the need to understand who ultimately controls a legal person.  

2.6.3.  Availability of beneficial ownership information 

The absence of public information about the beneficial owner is seen by some stakeholders as 
hindering  the  practical  implementation  of  the  requirements.  Obliged  entities,  with  support 
from civil society organisations, have made a strong plea for public support initiatives in this 
area.  The  European  Commission's  Internal  Security  Strategy  has  also  highlighted  this  issue 
and  suggested,  "in  the  light  of  discussions  with  its  international  partners  in  the  Financial 
Action  Task  Force,  revising  the  EU  Anti-Money  Laundering  legislation  to  enhance  the 
transparency of legal persons and legal arrangements"11.  

The European Parliament’s Resolution of 15th September 2011 called for rules to “make the 
fight  against  anonymous  shell  companies  in  secrecy  jurisdictions  (…)  a  key  element  of  the 
upcoming reform of the Anti-Money Laundering Directive”12. 

10

11 

12 

Report  on  the  legal,  regulatory  and  supervisory  implementation  across  EU  MS  in  relation  to  Beneficial  Owner  Customer  Due 
Diligence requirements under the Third Money Laundering Directive 26 September 2011. 
Commission  Communication:  "The  EU  Internal  Security  Strategy  in  Action:  Five  steps  towards  a  more  secure  Europe",  COM 
(2010)673 final. 
European Parliament Resolution of 15 September 2011 on the EU's efforts to combat corruption  

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The new FATF standards require countries to ensure that there is a set of basic information 
available in business registries and/or held by the company itself. For legal arrangements, the 
standards recognise the role of the trustee as holder of the beneficial owner information and 
introduce a requirement for trustees to disclose their status when they engage with reporting 
parties.  

2.6.4.  Further considerations 

Consideration  could  be  given  to  introducing  a  number  of  changes  into  the  Directive,  for 
example:  

• 

• 

Clarifying the definition of the beneficial owner, in the light of the revisions agreed 
by the FATF and the AMLC's conclusions;  

Including,  either  into  the  AML  Directive  or  in  another  existing  legal  instrument  in 
the company law area, measures to promote the transparency of legal persons/legal 
arrangements.  

2.7. 

Reporting obligations 

Article 22(1) of the Third AMLD requires obliged entities and persons to promptly inform the 
FIU if there are reasonable grounds to suspect money laundering or terrorist financing. This 
should be done directly, or "promptly and unfiltered" via a self-regulatory body if a country 
has designated one in respect of certain non-financial professions. Article 35(3) of the Third 
AMLD requires Member States to ensure that, wherever practicable, timely feedback be given 
on suspicious transaction reports.  

Some  concern  has  been  expressed  as  to  the  consistency  of  statistical  data  relating  to 
suspicious transaction reports13. Eurostat has collected a considerable amount of information 
relating  to  key  indicators  from  FIUs14.  In  addition,  with  respect  to  the  filing  of  reports,  a 
Commission Staff Working Paper15 has clarified to which country's FIU they should be sent 
in cross-border situations.  

Consideration could be given to introducing a number of clarifications and new provisions in 
the Directive: 

• 

• 

• 

13
14 

15

The  new  EU  framework  could  reinforce  the  existing  provisions  requiring  FIUs  to 
provide timely generic feedback to reporting entities; 

Introducing  an  explicit  role  for  self-regulatory  bodies  in  the  reporting  process  (e.g. 
establishing guidelines); 

Introducing an explicit requirement that reporting be done to the host country FIU;  

Art. 33 of the Third AMLD sets out the minimum statistical requirements that Member States are obliged to collect. 
See  Eurostat  Working  Paper  Money  Laundering  in  Europe,  http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-RA-10-
003/EN/KS-RA-10-003-EN.PDF 
Commission  Staff  Working  Paper  on  Anti-money  laundering  supervision  of  and  reporting  by  payment  institutions  in  various 
final,  4.10.2011,  http://ec.europa.eu/internal_market/company/docs/financial-
cross-border  situations,  SEC(2011)  1178 
crime/20111104-paper_en.pdf 

EN 

10 

   EN 

 
                                                 
 
 
• 

• 

Clarification  that  in  cases  where  Member  States  conclude  that  transmission  of 
Suspicious  Transaction  Reports  (STRs)  is  being  filtered,  they  should  actively 
consider requiring reporting to be made direct to the FIU.  

Reinforcing the requirement under Article 33 with respect to statistical data in order 
to ensure more comprehensive and comparable statistics. 

2.8. 

FIUs 

Article 38 of the Third AMLD establishes a role for the Commission to facilitate coordination 
between FIUs, but does not otherwise deal with FIU cooperation.  

The current framework for FIU Cooperation is based around a Council Decision dating back 
to 200016. Discussions at the FIU platform17 have revealed a number of shortcomings with the 
existing arrangements: cooperation on terrorist financing is not foreseen in the Decision and 
past international events have brought to light difficulties for FIUs to cooperate on the basis of 
lists  of  designated  persons,  or  to  take  action  before  an  STR  has  been  filed.  Practical 
experience  has  demonstrated  the  types  of  problems  that  result  from  different  interpretations 
about the legal basis granted by the Decision to undertake specific types of cooperation, such 
as the automatic exchange of information when links are found with another Member State. 
Some  of  the  problems  in  exchanging  information  stem  from  the  different  powers  that  FIUs 
have  at  national  level,  including  the  possibility  to  access  information,  and  this  has 
consequences for the effectiveness of cooperation.  
The Stockholm Programme for 2010-201418 calls on the Commission and Member States to 
“further  develop  information  exchange  between  the  Financial  Intelligence  Units  (FIUs)”  in 
order to tackle corruption and economic crime.  

Consideration  could  be  given  to  taking  into  account  recent  developments  at  the  FATF  with 
respect  to  FIUs,  where  some  of  the  relevant  changes  include  clarifying  that  FIUs  should  be 
able  to  access  the  information  obtained  by  any  obliged  entity  to  comply  with  AML/CFT 
requirements, that countries should have mechanisms in place to identify in a timely manner 
whether natural or legal persons hold or control  accounts  and  that a request for cooperation 
should trigger the same powers as for an STR filed domestically. In the specific context of the 
EU, consideration could be given to reinforcing EU FIU cooperation beyond the international 
standards, harmonising powers available to FIUs at national level and to taking on board work 
which  is  currently  being  developed  in  this  respect  by  the  EU  FIU  Platform.  Consideration 
could  also  be  given  to  integrating  provisions  concerning  FIU  Cooperation  into  the  future 
AML Directive. 

2.9. 

Group compliance 

Article 34 of the Directive requires obliged persons and institutions to establish “adequate and 
appropriate” AML/CFT risk management policies and procedures.  

In  their  2009  Working  Paper19,  the  Commission  services  reported  that  FIs  operating  in  a 
cross-border  context  have  generally  chosen  to  develop  an  AML  policy  at  group  level, 

16

17 

18

Council  Decision  2000/642/JHA  of  17  October  2000  concerning  arrangements  for  cooperation  between  financial  intelligence 
units of the Member States in respect of exchanging information. 
The  “EU  Financial  Intelligence  Units’  Platform”  was  set  up  in  2006  by  the  European  Commission,.  It  gathers  Financial 
Intelligence Units from the Member States. Its main purpose is to facilitate cooperation among the FIUs. . 
(2010/C 115/01). Official Journal of the European Union 4.5.2010 

EN 

11 

   EN 

 
                                                 
 
 
especially  within  the  EU.  The  new  FATF  standards  introduce  a  requirement  (which  largely 
mirrors  work  carried  out  by  the  Basel  Committee  on  Banking  Supervision)  that  financial 
groups implement group-wide programmes against money laundering and terrorist financing, 
including policies and procedures for sharing information within the group.  

Consideration  could  be  given  to  incorporating  new  requirements  into  the  Directive,  taking 
into account that the current Directive already contains a number of underlying assumptions 
of group level compliance in Articles 31(1) and 34(2). Additional clarifications might also be 
considered in order to address problems identified in the Commission Staff Working Paper, as 
follows: 

• 

• 

• 

The notion of “group” is currently only incorporated in Article 28(3), providing for 
exemptions to the prohibition of disclosure of the fact that an STR has been filed or 
that  a  ML/TF  investigation  is  being  carried  out.  A  definition  of  “group”  could  be 
incorporated into Article 3 to allow a broader scope of application; 

Introducing  an  explicit  possibility  of  allowing  intra-group  flows  of  information  on 
potentially suspicious transactions prior to the filing of a report, while respecting data 
protection obligations; 

The  possibility  of  allowing  information  flows  to  the  auditors  of  the  Head  Office. 
Independent  auditors  do  not  fall  within  the  definition  of  “group”,  and  therefore 
would not benefit from the exemption in Article 28(3). 

2.10. 

Supervision 

Article  37  of  the  Third  AMLD  obliges  Member  States  to  require  competent  authorities  to 
monitor  and  take  measures  to  ensure  compliance  with  the  requirements  of  the  Directive  by 
obliged persons and institutions. 

The  Commission  Staff  Working  Paper20,  although  it  deals  with  AML  supervision  of  and 
reporting by payment institutions, has wider implications with respect to home/host issues in 
other  areas.  The  Commission's  paper  clarifies  how  the  host  state  AML  rules  should  be 
complied with, in particular with respect to: 

• 

• 

• 

Allocation of supervisory powers between home and host authorities; 

The preventative and enforcement powers of host state authorities; 

The  ability,  subject  to  the  condition  of  proportionality,  of  host  state  authorities  to 
impose an obligation for a super-agent/central contact point for agents, or to have a 
compliance officer on their territory.  

The  AMLC  is  working  on  its  own  protocol  which  will  give  practical  application  to  the 
Commission's clarifications. 

19

20

Commission Staff working paper on “Compliance with the AML Directive by cross-border banking institutions at group level” 
SEC (2009) 939 of 30 June 2009. http://ec.europa.eu/internal_market/company/docs/financial-crime/compli_cbb_en.pdf.  
See footnote 15.  

EN 

12 

   EN 

 
                                                                                                                                                         
 
 
Consideration  could  be  given  to  introducing  further  clarifications  into  the  new  Directive,  as 
well  as  to  clarifying  the  articulation  between  the  passporting  provisions  in  the  Payment 
Services and E-Money Directives on the one hand, and the compliance with host state AML 
rules  on  the  other.  Clarification  could  be  given  to  how  AML  supervisory  powers  apply  in 
cross-border situations, for example, stipulating that the host authority should have ability to 
impose  sanctions,  including  termination  of  activity  where  CDD  procedures  are  not 
sufficiently  implemented,  or  through  provisions  which  place  the  onus  on  co-operation, 
information  sharing  and  delegation  of  responsibilities.  Finally,  consideration  could  also  be 
given  to  introducing  provisions  in  the  new  Directive  addressing  cooperation  between 
authorities.  

2.11. 

Self-Regulatory Bodies 

Article  37(5)  of  the  Third  AMLD  allows  self-regulatory  bodies  in  certain  sectors  (auditors, 
external  accountants,  tax  advisors,  notaries  and  other  legal  professionals)  to  monitor  and 
ensure  compliance  with  AML  requirements,  while  Article  23  allows  the  designation  of  an 
appropriate  self-regulatory  body  to  channel  suspicious  reports  to  the  Financial  Intelligence 
Unit.  

The  FATF  standards  recognise  the  role  of  self-regulatory  bodies,  provided  that  such  an 
organisation  can  ensure  that  its  members  comply  with  their  AML/CFT  obligations.  The 
standards include the possibility that such bodies could also establish guidelines and provide 
feedback on how to apply national measures, in particular with respect to reporting suspicious 
transactions.  Over  the  course  of  the  Commission's  consultations,  some  Member  States  have 
questioned  the  appropriateness  of  continuing  to  task  self-regulatory  bodies  with  such 
functions. 

Consideration could be given to whether self-regulatory bodies should continue to be tasked 
with  ensuring  compliance  with  AML  standards,  or  whether  their  role  needs  to  be  further 
defined, for example by explicitly tasking them to provide guidance on AML compliance and 
reporting,  in  line  with  the  FATF  standards.  It  has  also  been  suggested,  in  the  course  of  the 
Commission's consultations, that consideration might be given to the possibility of extending 
the Directive’s provisions to allow professional bodies in the real estate sector to also take on 
responsibilities  for  AML  monitoring  and  ensuring  compliance,  provided  that  they  meet  the 
conditions set out in Article 37(2) of the Third AMLD.  

2.12.  Third Country Equivalence  

The  Third  AMLD  allows  lighter  CDD  measures  to be  applied  in  the  case  of  FIs  situated  in 
EU/EEA  countries.  These  lighter  measures  are  extended  to  institutions  situated  in  third 
countries which impose AML requirements considered to be "equivalent" to those laid down 
in the Directive. Article 11(4) of the Third AMLD contains an obligation for Member States 
to  inform  each  other  and  the  Commission  of  cases  where  they  consider  that  a  third  country 
meets  EU  AML/CFT  standards.  In  order  to  co-ordinate  their  approach  on  equivalence, 
Member  States  have  agreed  on  a  regularly  updated  list  of  "equivalent  third  countries"  in 
accordance with a Common Understanding on the Procedures and Criteria for the Recognition 
of Third Countries' Equivalence21. 

21

http://ec.europa.eu/internal_market/company/docs/financial-crime/3rd-country-common-understanding_en.pdf 

EN 

13 

   EN 

 
                                                 
 
The  Third  AMLD  does  not  mandate  the  European  Commission  to  establish  a  binding 
“positive”  list  of  equivalent  third  countries.  The  assessment  of  third  country  equivalence 
remains a Member State competence. The Commission plays a facilitating role in this process, 
and,  should  the  system  be  maintained,  is  committed  to  ensuring  a  credible  and  transparent 
process for the establishment of the third country list. Given the move towards a risk-based 
approach, some Member States have queried whether it will still be appropriate, in the new 
Directive, to maintain the concept of equivalence. 

Consideration could be given to ascertaining: 

• 

• 

• 

• 

whether  an  equivalence  regime  is  needed  in  the  new  Directive,  in  light  of  the 
increasing move towards a risk based approach;  

whether  the  process  of  establishing  equivalence  "lists"  is  still  needed,  and  if  so, 
whether there is a role to be played at EU level (e.g. prescriptive approach to be set 
out in the Directive, maintaining the existing intergovernmental approach, mandating 
the AMLC with work in this area, etc.);  

whether  it  is  still  appropriate  to  maintain  a  provision  in  the  Directive  (currently 
Article 40(4)) on "black listing", given that this has never been used; 

whether a coordinated approach at EU level might be needed in order to coordinate 
measures in response to the FATF listing process.  

2.13.  Administrative Sanctions for Non Compliance with the Directive 

Article 39(2) of the Third AMLD obliges Member States to impose appropriate administrative 
measures or sanctions  against  FIs  for  infringements of national provisions which stem from 
the Directive. The measures and sanctions must be effective, proportionate and dissuasive.  

The Deloitte Study concludes that all Member States have implemented a national sanctioning 
regime  applicable  in  cases  of  non-compliance  with  the  provisions  of  the  Directive,  and  that 
such  sanctions  are  applied  in  practice.  However,  the  study  also  remarks  that  “the  variety  in 
national  penalty  regimes  is  so  large  that  it  is  not  possible  to  compare  penalties  through  all 
Member States”.  

Consideration  could  be  given  to  following  an  approach  similar  to  the  one  set  out  in  the 
Commission's  Communication  “Reinforcing  sanctioning  regimes  in  the  financial  sector”22, 
which would involve a greater harmonisation of the sanctioning regime by proposing a set of 
minimum common rules to be applied to key aspects of the sanctioning regime.  

2.14. 

Protection of Personal Data (DP) 

Most  private  stakeholders  believe  that  there  is  a  need  to  ensure  better  interaction  between 
AML and personal data protection obligations. A study23 done in 2008 by the FIU-Platform 
sought to identify possible convergence points as well as areas where difficulties might need 
to  be  reconciled  between  the  respective  legislation.  The  2009  Commission  Staff  Working 

22

23 

Reinforcing  sanctioning  regimes  in  the  financial  services  sector,  COM  (2010)  716  final,  8  December  2010,  http://eur-
lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2010:0716:FIN:EN:PDF 
Report  on  Confidentiality  and  data  protection  in  the  activity  of  FIUs,  http://ec.europa.eu/internal_market/company/financial-
crime/index_en.htm#fiu-report-money 

EN 

14 

   EN 

 
                                                 
 
paper24  concluded  that  the  interaction  of  AML  rules  with  national  data  protection  rules 
appeared  to  be  a  main  factor  impacting  bank's  AML  policies  at  group  level  and  hindering 
effective intra-group transfer of information. 

In  June  2011,  the  Article  29  Working  Party  on  Data  Protection  issued  its  "Opinion 
14/2011"25. The Opinion addresses the interaction between AML and personal data protection 
provisions  at  a  much  wider  level  than  the  mere  transfer  of  information,  and  calls  for  more 
detailed consideration of DP issues in the AML/CFT legislation to provide for effective data 
protection  compliance.  In  particular  the  Opinion  calls  for  “push”  data  sharing  schemes, 
privacy  assessments  of  the  model  of  global  risk  management  and  introduction  of  data 
protection  officers  by  different  bodies  or  entities  involved  in  AML/CFT  and  favouring 
segmented  risk  management  at  local  level.  It  also  calls  for  the  establishment  of  clear  and 
precise data retention periods in the AML/CFT legislation. Some elements of the opinion are 
reflected in the recently published proposals to update the EU's Data Protection legislation26.  

Consideration could be given to introducing, in the revised Directive, clear and balanced rules 
which  set  out  how  personal  data  should  be  handled  in  order  to  enable  effective  AML/CFT 
compliance  while  respecting  fundamental  rights.  In 
the  aforementioned 
developments in the data protection field, more detailed provisions might be needed to take 
into account, among other things, the principles for personal data processing, to grant a legal 
basis  both  for  such  processing  and  for  the  proportionate  restriction  of  the  rights  of  the  data 
subject  when  necessary  to  achieve  the  goals  of  the  AML/CFT  Directive,  provided  there  are 
adequate  safeguards  and  that  there  is  consistency  with  data  protection  acquis.  In  addition, 
consideration could be given to fostering further interaction between AML regulators and data 
protection supervisory authorities to reach a balanced application of the rules. 

line  with 

3. 

COMMISSION'S  ASSESSMENT  OF  THE  DIRECTIVE'S  TREATMENT  OF  LAWYERS  AND 
OTHER INDEPENDENT LEGAL PROFESSIONALS  

Article 42 of the Third AMLD requires the Commission to present a report to the European 
Parliament and the Council which includes a specific examination of the treatment of lawyers 
and other independent legal professionals.  

Under  the  Directive,  notaries  and  other  independent  legal  professionals  are  broadly  within 
scope, subject  to an exemption which Member States may apply  on the obligation to report 
suspicious  transactions  by  virtue  of  Article  23(2),  in  respect  of  “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  in,  or  concerning 
judicial proceedings.” In addition, Article 23(1) allows for the designation of “an appropriate 
self-regulatory  body  of  the  profession”  to,  in  the  first  instance,  receive  STRs  instead  of 
sending  them  directly  to  the  FIU.  In  such  a  case,  the  self-regulatory  body  has  the 
responsibility of forwarding the information to the FIU “promptly and unfiltered”. 

24

25

26

EN 

See footnote 20.  
Opinion 14/2011on data protection issues related to the prevention of money laundering and terrorist financing, 01008/2011/EN, 
WP 186, 13 June 2011, http://ec.europa.eu/justice/policies/privacy/docs/wpdocs/2011/wp186_en.pdf 
See 
http://ec.europa.eu/justice/newsroom/data-protection/news/120125_en.htm. 

the  Commission's 

(COM(2012) 

(COM(2012) 

protection 

proposals 

final). 

final) 

data 

and 

10 

11 

15 

   EN 

 
                                                 
 
 
 
3.1. 

Professional secrecy 

According  to  information  available  to  the  Commission,  all  Member  States  have  opted  to 
include the exemption of Article 23(2) of the Directive in their national legislation in relation 
to lawyers, but without precise description of when reporting outweighs client confidentiality. 
This  situation  creates  some  anxiety  from  legal  professions,  who  regularly  express  concerns 
that  the  obligations  imposed  by  the  Directive  allegedly  violate  the  lawyer's  obligation  of 
professional secrecy and the fundamental right to a fair trial and a fair defence.  

The European Court of Justice has ruled on this issue27. Although the judgement concerned 
Directive  91/308/CEE,  the  main  findings  of  the  Court  remain  valid  for  the  Third  AMLD. 
Based  on  this  ruling,  it  can  be  considered  that  the  AML  obligations  imposed  on  legal 
professionals  do  not  infringe  the  right  to  a  fair  trial  as  guaranteed  by  Article  47  of  the  EU 
Charter of Fundamental Rights and Article 6 of the ECHR.  

Indeed,  the  obligations  in  the  Directive  apply  to  legal  professionals  only  in  so  far  as  they 
advise their client in the preparation or execution of certain transactions, essentially those of a 
financial nature or concerning real estate (Article 2(1)(3)(b)), or when they act on behalf of 
and  for  their  client  in  any  financial  or  real  estate  transaction.  As  a  rule,  the  nature  of  these 
activities  is  such  that  they  take  place  in  a  context  with  no  link  to  judicial  proceedings  and, 
consequently, such activities fall outside the scope of the right to a fair trial.  

On  the  other  hand,  as  soon  as  a  legal  professional  acting  in  connection  with  a  real  estate 
transaction is called upon for assistance to defend the client or to represent them before the 
courts, or for advice as to the manner of instituting or avoiding judicial proceedings, they are 
exempted,  by  virtue  of  the  second  paragraph  of  Article  9(5)  and  of  Article  23(2)  of  the 
Directive,  from  the  requirements  under  the  first  paragraph  of  Article  9(5)  and  from  the 
information  and  cooperation  obligations  under  Article  23(1)  of  the  Third  AMLD.  This 
safeguards the right of the client to a fair trial. 

As to the implementation of the third AMLD, the right to a fair trial should be protected in all 
applicable  situations  through  sufficiently  detailed  and  clear  national  rules  to  allow  legal 
professionals to distinguish between the situations where the reporting obligation applies and 
the situations where it does not. 

When preparing its revision to the Directive, the Commission will, subject to consultation of 
the  relevant  stakeholders,  give  consideration  to  this  issue  in  its  impact  assessment,  and  in 
particular to the impact on fundamental rights, in line with the existing policy28. 

3.2. 

Suspicious transaction reports (“STR”s) 

The  Deloitte  study  found  that  levels  of  reporting  of  suspicious  transactions  by  some  non-
financial  professions  (in  particular  lawyers)  are  low  compared  to  those  of  FIs.  The  issue  of 
under-reporting in some jurisdictions remains a concern, and consideration could be given to 
ways to improving levels, as set out in Section 2.7 above.  

27 

28 

ECJ  C305/05,  Ordre  des  barreaux  francophones  et  germanophone  et  al.  V  Conseil  des  Ministres,  Para  33,  Judgement  of  the 
Court, 26 June 2007. 
Strategy for the effective implementation of the Charter of Fundamental Rights by the European Union (COM (2010) 573). 

EN 

16 

   EN 

 
                                                 
3.3. 

Definition of transaction 

Article 2 (1) (3) (b) sets the scope of the Directive to apply to “notaries and other independent 
legal professionals, when they participate, whether by acting on behalf of and for their client 
in  any  financial  or  real  estate  transaction,  or  by  assisting  in  the  planning  or  execution  of 
transactions  for  their  client”  concerning  a  number  of  listed  activities  (buying  and  selling  of 
real  estate,  managing  client  money,  etc).  Lawyers'  representatives  have  queried  which 
“transactions” are covered, and consideration could be given to a possible clarification in this 
respect. 

3.4. 

CDD measures 

Lawyers’  representatives  have  called  for  the  possibility  of  allowing  the  fulfilment  of  CDD 
requirements within a reasonable time frame and not always at the start of the relationship as 
required  in  Article  7.  The  FATF  standards29  require  identification  and  verification  to  be 
carried out at the start of a business relationship, although countries may permit verification to 
take place as soon as practicable afterwards if the ML and TF risks are effectively managed 
and  if  it  is  essential  not  to  interrupt  the  normal  conduct  of  business.  A  similar  provision 
already  exists  in  Article  9  of  the  Third  AMLD,  and  this  is  a  matter  for  Member  State 
discretion.  

There  have  also  been  suggestions  to  remove  the  requirement  to  provide  “on  request” 
information  on  the  identity  of  beneficial  owners  in  the  case  of  pooled  accounts  held  by 
notaries and other independent legal professionals (Article 11(2)(b)). However, the new FATF 
standards have removed the reference to pooled accounts as examples of low risk scenarios. 
Consideration will need to be given on how to reflect the treatment of pooled accounts in the 
new EU Directive. 

* 

* 

* 

The  above  findings  would  appear  to  suggest  that  it  may  not  be  necessary  to  fundamentally 
revise the treatment of lawyers in the new Directive. However, it may be appropriate to give 
further consideration to the under-reporting of STRs.  

4. 

CONCLUSION 

This report sets out the various issues raised by the Commission's review of the Third AMLD, 
the  revisions  of  the  FATF  Recommendations,  and  the  Directive's  clauses  that  require  the 
Commission  to  report  to  the  European  Parliament  and  the  Council.  Generally,  the  existing 
framework  appears  to  work  relatively  well,  and  no  fundamental  shortcomings  have  been 
identified which would require far-reaching changes to the Third AMLD.. The Directive will 
have to be revised in order to update it in line with the revised FATF Recommendations. In 
this  context,  one  issue  that  will  need  to  be  considered  is  the  level  of  harmonisation  of  the 
future  EU  framework.  An  important  challenge  for  the  future  will  be  to  focus  efforts  on 
improving the effectiveness of the rules. This is an area of work that the FATF is currently 
developing.  

29

Recommendation 11 (ex 10) 

EN 

17 

   EN 

 
                                                 
 
The  Commission  invites  comments  to  the  issues  raised  and  the  likely  impact,  including 
impacts  on  fundamental  rights  as  guaranteed  by  the  Charter  of  Fundamental  Rights  of  the 
EU30, of any possible changes to the Third AMLD by 13 June 2012. Stakeholders are invited 
to send their comments to the following email address: MARKT-AML@ec.europa.eu  

Comments  will  inform  the  legislative  proposals  that  will  be  put  forward  later  this  year  to 
revise  the  Directive.  The  responses  received  will  be  available  on  the  Commission  website 
unless confidentiality is specifically requested, and the Commission will publish a summary 
of the results of the consultation 

* 

* 

* 

Annex: Cross-border Wire Transfers 

Although  the  regulation  of  cross-border  wire  transfers  falls  outside  the  scope  of  the  third 
AML  Directive,  it  forms  an  important  element  of  the  FATF  standards.  The  EU  has  fully 
implemented  the  existing  FATF  standards  via  a  separate  Regulation31.  and,  in  order  to 
respond to its obligations under the review clause in Article 19 of the Regulation, a study on 
the application of the regulation is under preparation. The results of this study will be taken 
into  account  in  the  future  proposal  to  implement  the  recent  changes  to  the  FATF 
Recommendations.  The  new  FATF  standards  in  particular  include  a  requirement  to  include 
information  about  the  beneficiary  in  wire  transfers,  as  well  as  an  explicit  obligation  to  take 
freezing action with respect to UN Resolutions. 

In  particular,  the  study  will  gather  evidence  about  how  the  Fund  Transfers  Regulation 
(1781/2006)  is  working  in  Member  States,  and  any  problems  which  have  arisen,  and  will 
provide recommendations as to what improvements might be made.  

The  Commission  will  ensure  that  the  introduction  of  new  EU  rules  on  fund  transfers  are 
synchronised with the revision of the Third AMLD. 

30 
31

Strategy for the effective implementation of the Charter of Fundamental Rights by the European Union (COM 2010, 573 final) . 
Regulation 1781/2006 on information on the payer accompanying transfers of funds, 15 November 2006,  

EN 

18 

   EN