Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing
Date: 2013-02-05
Institutions: European Commission
Subjects: banking supervision, customers, economic offence, exchange of information, financial institution, legal person, money laundering, natural person, terrorism

EUROPEAN 
COMMISSION 

Strasbourg, 5.2.2013  
COM(2013) 45 final 

2013/0025 (COD) 

Proposal for a 

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on the prevention of the use of the financial system for the purpose of money laundering 
and terrorist financing 

(Text with EEA relevance) 

{SWD(2013) 21 final} 
{SWD(2013) 22 final} 

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EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

Grounds for and objectives of the proposal 

The  main  objectives  of  the  measures  proposed  are  to  strengthen  the  Internal  Market  by 
reducing complexity across borders, to safeguard the interests of society from criminality and 
terrorist  acts,  to  safeguard  the  economic  prosperity  of  the  European  Union  by  ensuring  an 
efficient business environment, to contribute to financial stability by protecting the soundness, 
proper functioning and integrity of the financial system.  

These objectives will be achieved by ensuring consistency between the EU approach and the 
international  one;  ensuring  consistency  between  national  rules,  as  well  as  flexibility  in  their 
implementation;  ensuring  that  the  rules  are  risk-focused  and  adjusted  to  address  new 
emerging threats. 

In  addition,  this  proposal  incorporates  and  repeals  Commission  Directive  2006/70/EC  of  1 
August 2006 laying down implementing measures for Directive 2005/60/EC1, thus improving 
the  comprehensibility  and  accessibility  of  the  anti-money  laundering  (AML)  legislative 
framework for all stakeholders. 

The  Commission  intends  to  complement  the  current  proposal  by  strengthening  the  EU's 
repressive response to money laundering. Consequently it is planned to propose criminal law 
harmonisation for this offence based on Article 83(1) of the Treaty on the Functioning of the 
European Union (TFEU) in 20132. 

General context 

The  breaking  down  of  barriers  within  the  Internal  Market  facilitates  not  only  the 
establishment  or  development  of  legitimate  businesses  across  the  EU,  but  may  also  provide 
increased  opportunities  for  money  laundering  and  terrorist  financing.  Criminals  engaged  in 
money  laundering  could  therefore  attempt  to  conceal  or  disguise  the  true  nature,  source  or 
ownership  of  the  assets  in  question  and  transform  them  into  seemingly  legitimate  proceeds. 
Moreover, terrorist financing can be funded through both legitimate and criminal activities, as 
terrorist organisations engage in revenue-generating activities which in themselves may be, or 
at least appear to be, legitimate. Money laundering and terrorism financing create thus a high 
risk to the integrity, proper functioning, reputation and stability of the financial system, with 
potentially devastating consequences for the broader society. 

European  legislation  has  been  adopted  to  protect  the  proper  functioning  of  the  financial 
system  and  of  the  Internal  Market.  However,  the  changing  nature  of  money  laundering  and 
terrorist financing threats, facilitated by a constant evolution of technology and of the means 
at the disposal of criminals, requires a permanent adaptation of the legal framework to counter 
such threats. 

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2 

OJ L 214, 4.8.2006, p. 29. 
http://ec.europa.eu/governance/impact/planned_ia/docs/2013_home_006_money_laundering_en.pdf 

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At the EU level, Directive 2005/60/EC of 26 October 2005 on the prevention of the use of the 
financial  system  for  the  purpose  of  money  laundering  and  terrorist  financing3  (hereinafter 
referred  to  as  the  Third  AMLD)  sets  out  the  framework  designed  to  protect  the  soundness, 
integrity  and  stability  of  credit  and  financial  institutions  and  confidence  in  the  financial 
system as a whole, against the risks of money laundering and terrorist financing. 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 level. 

At  international  level,  the  FATF  has  undertaken  a  fundamental  review  of  the  international 
standards and adopted a new set of Recommendations in February 2012.  

itself 

further 

strengthens  elements  of 

In  parallel  to  the  international  process,  the  European  Commission  has  been  undertaking  its 
own  review  of  the  European  framework.  A  revision  of  the  Directive  at  this  time  is 
complementary  to  the  revised  FATF  Recommendations,  which  in  themselves  represent  a 
substantial  strengthening  of  the  anti-money  laundering  and  combating  terrorist  financing 
revised 
framework.  The  Directive 
Recommendations,  in  particular  in  relation  to  scope  (by  including  providers  of  gambling 
services  and  dealers  in  goods  with  a  threshold  of  EUR  7  500),  beneficial  ownership 
information (which is to be made available to obliged entities and competent authorities), and 
in the provisions on sanctions. It takes into account the necessity to increase effectiveness of 
AML  measures  by  adapting  the  legal  framework  to  ensure  that  risk  assessments  are  carried 
out at the appropriate level and with the necessary degree of flexibility to allow adaptation to 
the  different  situations  and  actors.  As  a  consequence  of  this,  the  Directive,  while  setting  a 
high level of common standards, requires Member States, supervisory authorities and obliged 
entities to assess risk and take adequate mitigating measures commensurate to such risk. This 
results in the Directive being less detailed as regards concrete measures to be taken. 

the 

Existing provisions in this area 

Various  legal  instruments  have  been  adopted  to  ensure  an  effective  anti-money  laundering 
and combating terrorist financing framework at EU level. The most important ones are: 

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The  Third  AML  Directive,  which  covers  most  of  the  40  FATF  Recommendations 
and some of the 9 FATF Special Recommendations;  

Regulation (EC) No 1781/2006 of 15 November  2006 on information  on the payer 
accompanying  transfers  of  funds4,  which  implements  FATF  SR  VII  on  wire 
transfers; 

Regulation (EC) No 1889/2005 of 26 October 2005 on controls of cash entering or 
leaving the Community5, which implements FATF SR IX on cash couriers; 

Directive  2007/64/EC  of  13  December  2007  on  payment  services  in  the  internal 
market6 (Payment Services Directive) which, in combination with the Third AMLD, 
implements FATF SR VI on alternative remittance; 

OJ L 309, 25.11.2005, p.15. 
OJ L 345, 8.12.2006, p. 1. 
OJ L 309, 25.11.2005, p. 9. 
OJ L 319, 5.12.2007, p. 1. 

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Regulation  (EC)  No  2580/2001  of  27  December  2001  on  specific  restrictive 
measures  directed  against  certain  persons  and  entities  with  a  view  to  combating 
terrorism7  which,  together  with  Regulation  (EC)  No  881/2002  of  27  May  20028 
implementing UN Al Qai'da and Taliban sanctions, implements part of FATF SR III 
on freezing terrorist assets. 

Consistency with other policies and objectives of the Union  

The  proposed  adaptation  of  the  anti-money  laundering  and  combating  terrorist  financing 
framework is fully coherent with EU policies in other areas. In particular: 

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the  Stockholm  Programme9,  which  aims  at  achieving  an  open  and  secure  Europe 
serving  and  protecting  citizens,  calls  on  Member  States  and  the  Commission  to 
further develop information exchange between the FIUs, in the fight against money 
laundering; 

the  EU's  Internal  Security  Strategy10  identifies  the  most  urgent  challenges  to  EU 
security  in  the  years  to  come  and  proposes  five  strategic  objectives  and  specific 
actions  for  2011-2014  to  help  make  the  EU  more  secure.  This  includes  tackling 
money laundering and preventing terrorism. The need to update the EU anti-money 
laundering  and  combating  terrorist  financing  framework  with  a  view  to  enhancing 
the  transparency  of  legal  persons  and  legal  arrangements  has  been  specifically 
recognised; 

the potential for misuse of new technologies to conceal transactions and hide identity 
makes  it  important  for  Member  States  to  be  aware  of  technological  developments 
and  simulate  the  use  of  electronic  identification,  electronic  signature  and  trust 
services  for  electronic  transactions,  in  line  with  Commission’s  proposal  for  a 
Regulation  on  electronic  identification  and  trust  services  for  electronic  transactions 
in the internal market11; 

in  March  2012,  the  European  Commission  adopted  a  proposal  on  the  freezing  and 
confiscation  of  proceeds  of  crime  in  the  EU12  which  seeks  to  ensure  that  Member 
States  have  in  place  an  efficient  system  to  freeze,  manage  and  confiscate  criminal 
assets, backed by the necessary institutional setup, financial and human resources; 

with  respect  to  data  protection,  the  proposed  clarifications  to  the  Third  AMLD  are 
fully  in  line  with  the  approach  set  out  in  the  Commission's  recent  data  protection 
proposals13,  whereby  a  specific  provision14  empowers  EU  or  national  legislation  to 

OJ L 344, 28.12.2001, p. 70. 
OJ L 139, 29.5.2002, p. 9. 
OJ C 115, 4.5.2010, p. 1. 
Communication  from  the  Commission  to  the  European  Parliament  and  the  Council  "The  EU  Internal 
Security Strategy in Action: Five steps towards a more secure Europe" (COM(2010)673 final).  
COM(2012)238/2 
Proposal for a Directive of the European Parliament and of the Council on the freezing and confiscation 
of proceeds of crime in the European Union (COM(2012)085 final). 
Proposal for a Directive of the European Parliament and of the Council on the protection of individuals 
with regard to the processing of personal data by competent authorities for the purposes of prevention, 
investigation, detection or prosecution of criminal offences or the execution of criminal penalties, and 
the free movement of such data (COM(2012)010 final) and Proposal for a Regulation of the European 
Parliament and of the Council on the protection of individuals with regard to the processing of personal 

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restrict the scope of the obligations and rights provided for in the draft regulation on 
a number of specified grounds, including the prevention, investigation, detection and 
prosecution of criminal offences; 

with  respect  to  sanctions,  the  proposal  to  introduce  a  set  of  minimum  principles-
based  rules  to  strengthen  administrative  sanctions  is  fully  in  line  with  the 
Commission's  policy  as  outlined  in  its  Communication  "Reinforcing  sanctioning 
regimes in the financial services sector"15; 

with respect to financial inclusion, the fact that applying an overly cautious approach 
to  anti-money  laundering  and  combating  terrorist  financing  safeguards  might  have 
the unintended consequence of excluding legitimate businesses and consumers from 
the financial system has been recognised. Work has been carried out on this issue at 
international  level16  to  provide  guidance  to  support  countries  and  their  financial 
institutions  in  designing  anti-money  laundering  and  combating  terrorist  financing 
measures  that  meet  the  national  goal  of  financial  inclusion,  without  compromising 
the measures that exist for the purpose of combating crime. At EU level, the issue of 
financial  inclusion  is  currently  under  consideration  as  part  of  the  work  on  a  Bank 
Accounts package; 

with  respect  to  the  cooperation  with  persons  or  authorities  (including  courts  and 
administrative  bodies)  concerned  with  the  assessment  of,  collection  of,  the 
enforcement or prosecution in respect of, or the determination of appeals in relation 
to taxes and any other public levy, the proposal is consistent with the approach for 
fighting  against  tax  fraud  and  tax  evasion17  followed  at  international  level  in 
including a specific reference to tax crimes within the serious crimes which can be 
considered  as  predicate  offences  to  money  laundering.  The  enhancement  of  the 
customer  due  diligence  procedures  for  AML  purposes  will  also  assist  the  fight 
against tax fraud and tax evasion. 

2. 

RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND 
IMPACT ASSESSMENTS 

Consultation of interested parties 

The Commission adopted in April 2012 a report on the application of the Third AMLD and 
solicited comments from all stakeholders. The report focused on a number of identified key 
themes  (e.g.  including  application  of  a  risk-based  approach,  extending  the  scope  of  the 
existing  framework,  adjusting  the  approach  to  customer  due  diligence,  clarifying  reporting 
obligations and supervisory powers, enhancing FIU co-operation etc.), which were essential 
for the review of the Third AMLD.  

The  Commission  received  77  contributions  from  public  authorities,  civil  society,  business 
federations  and  companies  in  several  fields  (including  financial  services,  gambling  sector, 

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data  and  on  the  free  movement  of  such  data  (General  Data  Protection  Regulation)  (COM(2012)011 
final).  
Article 21 of the General Data Protection Regulation. 
COM(2010)716 final. 
"Anti-money laundering and terrorist financing measures and Financial Inclusion", FATF, June 2011. 
Commission  Communication  presenting  an  Action  Plan  to  strengthen  the  fight  against  tax  fraud  and 
evasion, adopted by the Commission on 6 December 2012, COM(2012)722 final 

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liberal  professions,  real  estate  sector,  trust  and  company  service  providers),  representing  a 
broad  variety  of  stakeholders.  An  additional  number  of  comments,  position  papers  and 
contributions were received outside the consultation.  

The  overall  results  of  the  consultation18  point  to  a  general  confirmation  of  the  issues  and 
problems highlighted by the Commission's Report, as well as broad support for the proposed 
alignment to the revised FATF standards and for greater clarification in certain areas (i.e. data 
protection and how to apply the rules in cross-border situations).  

Use of expertise 

Substantial  efforts  have  been  made  to  obtain  evidence  in  this  field  and  to  ensure  full 
engagement of the different stakeholders. 

In particular, over the course of 2010, a study by external consultants Deloitte19 was carried 
out on behalf of the Commission to look into the application of the Third AML Directive.  

Impact assessment 

The  Commission  has  undertaken  an  Impact  Assessment20,  where  it  analysed  the  potential 
consequences of money laundering and terrorism financing. In particular, the financial system 
failing  to  prevent  money  laundering  and  terrorist  financing  can  lead  to  negative  economic 
impacts (arising from disruptions to international capital flows, reduced investment and lower 
economic growth) and financial market instability (resulting from reluctance of other financial 
intermediaries  to  engage  in  business,  loss  of  reputation,  drop  in  confidence  and  prudential 
risks).  

The following problem drivers were examined:  

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the  different  application  of  existing  EU  rules  across  Member  States,  leading  to 
reduced legal certainty; 

the inadequacies and loopholes with respect to the current EU rules; 

the  inconsistency  of  the  current  rules  with  the  recently  revised  international 
standards. 

This requires the achievement of the following operational objectives:  

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ensure consistency between national rules and, where appropriate, flexibility in their 
implementation by strengthening and clarifying current requirements;  

ensure that the rules are risk-focused and adjusted to address new emerging threats, 
by strengthening and clarifying current requirements; 

feedback  statement 

is  available  at  http://ec.europa.eu/internal_market/company/financial-

The 
crime/index_en.htm 
The study is available at http://ec.europa.eu/internal_market/company/financial-crime/index_en.htm 
The 
crime/index_en.htm 

is  available  at  http://ec.europa.eu/internal_market/company/financial-

impact  assessment 

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ensure that the EU approach is consistent with the approach followed at international 
level by extending the scope of application, strengthening and clarifying the current 
requirements. 

The impact assessment concluded that the best options to improve the existing situation would 
be:  

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Broadening  scope  to  cover  gambling:  broaden  the  scope  of  the  Directive  beyond 
"casinos" to cover the gambling sector; 

Thresholds  for  traders  in  goods:  reduce  the  scope  and  customer  due  diligence 
thresholds for traders in high value goods from EUR 15 000 to EUR 7 500 for cash 
transactions; 

Sanctions regimes: introduce a set of minimum principles-based rules to strengthen 
administrative sanctions; 

Comparability of statistical data: reinforce and make more precise the requirement 
regarding the collecting and reporting of statistical data; 

Data  protection:  introduce  provisions  in  the  Directive  to  clarify  the  interaction 
between  anti-money  laundering/combating  terrorist  financing  and  data  protection 
requirements; 

Inclusion of tax crimes in the scope: include an explicit reference to tax crimes as a 
predicate offence; 

Availability  of  beneficial  owner  information:  require  all  companies  to  hold 
information on their beneficial owners; 

Identification  of  Beneficial  Owner  (BO):  maintain  the  approach  which  requires 
identification of the BO as of a 25% ownership threshold, but clarify what the "25% 
threshold" refers to; 

Home and host supervisory responsibilities for AML: introduce new rules clarifying 
that branches and subsidiaries situated in other Member States than the head office 
apply  host  state  AML  rules  and  reinforce  cooperation  arrangements  between  home 
and host supervisors; 

Cross-border  cooperation  between  Financial  Intelligence  Units  (FIUs):  introduce 
new requirements that would strengthen FIU powers and cooperation; 

National Risk Assessments: introduce a requirement for Member States to carry out a 
risk assessment at national level and take measures to mitigate risks; 

Customer Due Diligence: Member States to ensure that enhanced due diligence must 
be  conducted  in  certain  situations  of  high  risk,  while  allowing  them  to  permit 
simplified due diligence in lower risk situations; 

Equivalence of third country regimes: remove the "white list" process; 

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Risk-Sensitive  Approach  to  supervision:  specific  recognition  in  the  Directive  that 
supervision can be carried out on a risk-sensitive basis; 

Treatment  of  Politically  Exposed  Persons  (PEPs):  introduce  new  requirements  for 
domestic  PEPs/PEPs  working  in  international  organisations,  with  risk-sensitive 
measures to be applied. 

In  addition,  the  impact  assessment  analysed  the  impact  of  the  legislative  proposals  on 
Fundamental  Rights.  In  line  with  the  Charter  of  Fundamental  rights,  the  proposals  seek  in 
particular  to  ensure  protection  of  personal  data  (Article  8  of  the  Charter)  by  clarifying  the 
conditions under which personal data can be stored and transferred. The proposals will bring 
no change and therefore have no impact on the right to an effective remedy and to a fair trial 
(Article  47  of  the  Charter)  which  are  not  infringed  by  the  Directive  as  confirmed  by  the 
European  Court  of  Justice  (case  C-305/05).  The  respect  for  private  life  (Article  7),  the 
freedom to conduct a business (Article 16) and the prohibition of discrimination (Article 21) 
have  been  duly  taken  into  account.  Finally,  the  proposal  will  indirectly  help  to  protect  the 
right to life (Article 2 of the Charter). 

3. 

LEGAL ELEMENTS OF THE PROPOSAL 

Legal basis 

The current proposal is based on Article 114 TFEU.  

Subsidiarity and proportionality 

In accordance with the principles of subsidiarity and proportionality as set out in Article 5 of 
the Treaty on European Union, the objectives of the proposal cannot be sufficiently achieved 
by Member States and can therefore be better achieved at the Union level. The proposal does 
not go beyond what is necessary to achieve those objectives. 

Recital  2  of  the  Third  AMLD  underlines  the  necessity  of  having  measures  at  the  EU  level 
aiming at protecting the soundness, integrity and stability of credit and financial institutions 
and confidence in the financial system as a whole, "in order to avoid Member States adopting 
measures to protect their financial systems which could be inconsistent with the functioning 
of  the  internal  market  and  with  the  prescriptions  of  the  rule  of  law  and  Community  public 
policy, Community action in this area is necessary". 

As  massive  flows  of  dirty  money  and  terrorist  financing  can  damage  the  stability  and 
reputation  of  the  financial  sector  and  threaten  the  internal  market,  any  measures  adopted 
solely  at  national  level  could  have  adverse  effects  on  the  EU  Single  Market:  an  absence  of 
coordinated rules across Member States aimed at protecting their financial systems could be 
inconsistent with the functioning of the internal market and result in fragmentation. EU action 
is also justified in order to maintain a level playing field across the EU – with entities in all 
Member  States  subject  to  a  consistent  set  of  anti-money  laundering  and  combating  terrorist 
financing obligations. 

The Commission considers that the proposed rule changes are proportionate to the objectives. 
By  imposing  thresholds  on  scope  and  customer  due  diligence,  the  Commission  has  taken 
proportionate steps to limit the applicability of the Directive, where appropriate. In addition, 
the  Directive  allows  certain  of  the  preventative  measures  to  be  taken  by  SMEs  to  be 

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proportionate  to  the  size  and  nature  of  the  obliged  entity.  At  the  same  time,  by  ensuring  a 
tailored  and  flexible  risk-based  approach,  Member  States  should  not  be  constrained  from 
adopting  measures  and  taking  actions  as  necessary  to  counter  important  threats  they  may 
confront  at  national  level.  These  measures  are  better  suited  to  a  Directive  than  a  fully 
harmonised  Regulation,  with  the  inclusion  of  processes  at  EU  level  to  ensure  greater 
coordination  and  the  development  of  supranational  approaches,  together  with  further 
harmonisation in specific areas ensuring that EU objectives are also met. Although ensuring 
an  effective  AML/counter  terrorism  financing  system  entails  some  cost  for  obliged  entities 
(these costs have been analysed in the Impact Assessment), the Commission considers that the 
benefits associated with preventing money laundering and terrorist financing will continue to 
outweigh the costs. 

The  evaluation  of  the  new  international  standards  will  begin  in  the  fourth  quarter  of  2013. 
Unless  the  Commission  provides  clear  and  early  indications  of  the  desired  EU  approach  to 
their implementation, there is a risk that those EU Member States who will be evaluated first 
will opt for solutions which may not coincide with the proposed EU approach, thus rendering 
agreement of common EU rules more difficult. 

Finally, with the adoption of revised international standards, commitments have been taken by 
the Commission as well as all EU Member States (either directly or via their membership of 
FATF or Moneyval) to ensure their implementation. 

4. 

BUDGETARY IMPLICATION  

The proposal has no implication for the budget of the European Union. 

5. 

ADDITIONAL INFORMATION  

Detailed explanation of the proposal 

The main modifications to the Third AMLD are: 

– 

Extension of the scope of the Directive: two main changes are proposed to the scope:  

(a) 

the  threshold  for  traders  in  high  value  goods  dealing  with  cash  payments  be 
reduced  from  EUR  15  000  to  EUR  7  500.  Currently  traders  in  goods  are 
included in the scope of the Directive if they deal with cash payments of EUR 
15  000  or  more.  After  receiving  information  from  Member  States  that  this 
relatively  high  threshold  was  being  exploited  by  criminals  it  is  proposed  to 
lower it to EUR 7 500. In addition, the new proposal requires traders to carry 
out  customer  due  diligence  when  carrying  out  an  occasional  transaction  of  at 
least EUR 7 500, a reduction from the previous threshold of EUR 15 000. Both 
the definition and the threshold show a tightening of measures against the use 
of these traders for money laundering purposes across the EU; 

(b) 

the  scope  of  the  Directive  includes  "providers  of  gambling  services"  (in 
accordance with Directive 2000/31/EC of 8 June 2000 on certain legal aspects 
of  information  society  services,  in  particular  electronic  commerce,  in  the 

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Internal  Market21).  The  current  Third  AMLD  and  the  revised  FATF 
Recommendations  require  that  only  casinos  be  included  in  the  scope  of  anti-
money  laundering/combating  terrorist  financing  legislation.  Evidence  in  the 
EU suggests that this leaves other areas of gambling vulnerable to miss-use by 
criminals. 

– 

Risk-based approach: The Directive recognises that the use of a risk-based approach 
is  an  effective  way  to  identify  and  mitigate  risks  to  the  financial  system  and  wider 
economic  stability  in  the  internal  market  area.  The  new  measures  proposed  would 
require  evidence-based  measures  to  be  implemented  in  three  main  areas,  each  of 
which  would  be  supplemented  with  a  minimum  list  of  factors  to  be  taken  into 
consideration or guidance to be developed by the European Supervisory Authorities: 

(a)  Member  States  will  be  required  to  identify,  understand  and  mitigate  the  risks 
facing them. This can be supplemented by risk assessment work carried out at a 
supra-national level (e.g. by the European Supervisory Authorities or Europol) 
and the results should be shared with other Member States and obliged entities. 
This  would  be  the  starting  point  for  the  risk-based  approach,  and  would 
recognise  that  an  EU-wide  response  can  be  informed  by  Member  States' 
national experience;  

(b)  Obliged entities operating within the scope of the Directive would be required 
to identify, understand and mitigate their risks, and to document and update the 
assessments of risk that they undertake. This is a key element of the risk-based 
approach, allowing competent authorities (such as supervisors) within Member 
States  to  thoroughly  review  and  understand  the  decisions  made  by  obliged 
entities  under  their  supervision.  Ultimately,  those  adopting  a  risk-based 
approach would be fully accountable for the decisions they make;  

(c)  The proposal would recognise that the resources of supervisors can be used to 
concentrate  on  areas  where  the  risks  of  money  laundering  and  terrorist 
financing  are  greater.  The  use  of  a  risk-based  approach  would  mean  that 
evidence is used to better target the risks. 

Simplified and Enhanced Customer Due Diligence: in the proposal, obliged entities 
would  be  required  to  take  enhanced  measures  where  risks  are  greater  and  may  be 
permitted to take simplified measures where risks are demonstrated to be less. With 
regard to the current (Third) AMLD, the provisions on simplified due diligence were 
found to be overly permissive, with certain categories of client or transaction being 
given  outright  exemptions  from  due  diligence  requirements.  The  revised  Directive 
would therefore tighten the rules  on simplified  due diligence and  would  not permit 
situations where exemptions apply. Instead, decisions on when and how to undertake 
simplified  due  diligence  would  have  to  be  justified  on  the  basis  of  risk,  while 
minimum requirements of the factors to be taken into consideration would be given. 
In one of the situations where enhanced due diligence should always be conducted, 
namely  for  politically  exposed  persons,  the  Directive  has  been  strengthened  to 
include  politically  exposed  persons  who  are  entrusted  with  prominent  public 
functions domestically, as well as those who work for international organisations. 

– 

21 

OJ L 178, 17.7.2000, p. 1. 

EN 

10 

   EN 

                                                 
– 

– 

– 

– 

– 

– 

– 

Information on the beneficial owner: the revised Directive proposes new measures in 
order  to  provide  enhanced  clarity  and  accessibility  of  beneficial  ownership 
information.  It  requires  legal  persons  to  hold  information  on  their  own  beneficial 
ownership. This information should be made available to both competent authorities 
and  obliged  entities.  For  legal  arrangements,  trustees  are  required  to  declare  their 
status  when  becoming  a  customer  and  information  on  beneficial  ownership  is 
similarly required to be made available to competent authorities and obliged entities.  

Third country equivalence: the revised Directive will remove the provisions relating 
to  positive  "equivalence",  as  the  customer  due  diligence  regime  is  becoming  more 
strongly risk-based and the use of exemptions on the grounds of purely geographical 
factors is less relevant. The current provisions of the Third AMLD require decisions 
to  be  made  on  whether  third  countries  have  anti-money  laundering/combating 
terrorist financing systems that are "equivalent" to those in the EU. This information 
was then used to allow exemptions for certain aspects of customer due diligence.  

Administrative  sanctions:  in  line  with  Commission  policy  to  align  administrative 
sanctions,  the  revised  Directive  contains  a  range  of  sanctions  that  Member  States 
should  ensure  are  available  for  systematic  breaches  of  key  requirements  of  the 
Directive,  namely  customer  due  diligence,  record  keeping,  suspicious  transaction 
reporting and internal controls. 

Financial Intelligence Units: the proposal would bring in the provisions of 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 and further extend and strengthen cooperation. 

European Supervisory Authorities (ESA): the proposal contains several areas where 
work by the ESA is envisaged. In particular, EBA, EIOPA and ESMA are asked to 
carry  out  an  assessment  and  provide  an  opinion  on  the  money  laundering  and 
terrorist financing risks facing the EU. In addition, the greater emphasis on the risk-
based  approach  requires  an  enhanced  degree  of  guidance  for  Member  States  and 
financial  institutions  on  what  factors  should  be  taken  into  account  when  applying 
simplified  customer  due  diligence  and  enhanced  customer  due  diligence  and  when 
applying  a  risk-based  approach  to  supervision.  In  addition,  the  ESAs  have  been 
tasked  with  providing  regulatory  technical  standards  for  certain  issues  where 
financial  institutions  have  to  adapt  their  internal  controls  to  deal  with  specific 
situations. 

Data Protection: the need to strike a balance between allowing robust systems and 
controls and preventative measures against money laundering and terrorist financing 
on the one hand, and protecting the rights of data subjects on the other is reflected in 
the proposal. 

Transposition measures: Due to the complexity and scope of the proposal, Member 
States are required to transmit a correlation table of the provisions of their national 
law and the Directive. 

European Economic Area  

The proposal is relevant for the EEA countries.  

EN 

11 

   EN 

2013/0025 (COD) 

Proposal for a 

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on the prevention of the use of the financial system for the purpose of money laundering 
and terrorist financing 

(Text with EEA relevance) 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 114 thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national Parliaments, 

Having regard to the opinion of the European Economic and Social Committee1,  

Having regard to the opinion of the European Central Bank2, 

After consulting the European Data Protection Supervisor3, 

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1)  Massive flows of dirty money can damage the stability and reputation of the financial 
sector and threaten the single market, and terrorism shakes the very foundations of our 
society.  In  addition  to  the  criminal  law  approach,  a  preventive  effort  via  the  financial 
system can produce results.  

(2) 

The soundness, integrity and stability of credit and financial institutions and confidence 
in  the  financial  system  as  a  whole  could  be  seriously  jeopardised  by  the  efforts  of 
criminals  and  their  associates  either  to  disguise  the  origin  of  criminal  proceeds  or  to 
channel  lawful  or  unlawful  money  for  terrorist  purposes.  In  order  to  facilitate  their 
criminal activities, money launderers and terrorist financers could try to take advantage 
of  the  freedom  of  capital  movements  and  the  freedom  to  supply  financial  services 
which  the  integrated  financial  area  entails,  if  certain  coordinating  measures  are  not 
adopted at Union level.  

1 
2 
3 

OJ C , , p. . 
OJ C , , p. . 
OJ C , , p. . 

EN 

12 

   EN 

                                                 
(3) 

to  cover 

The  current  proposal  is  the  fourth  Directive  to  deal  with  the  threat  of  money 
laundering. Council Directive 91/308/EEC of 10 June 1991 on prevention of the use of 
the financial system for the purpose of money laundering4 defined money laundering 
in  terms  of  drugs  offences  and  imposed  obligations  solely  on  the  financial  sector. 
Directive  2001/97/EC  of  the  European  Parliament  and  of  the  Council  of  December 
2001  amending  Council  Directive  91/308/EEC5  extended  the  scope  both  in  terms  of 
the crimes covered and the range of professions and activities covered. In June 2003 
the  Financial  Action  Task  Force  (hereinafter  referred  to  as  the  FATF)  revised  its 
terrorist  financing,  and  provided  more  detailed 
Recommendations 
requirements  in  relation  to  customer  identification  and  verification,  the  situations 
where  a  higher  risk  of  money  laundering  may  justify  enhanced  measures  and  also 
situations where a reduced risk may justify less rigorous controls. These changes were 
reflected in Directive 2005/60/EC of the European Parliament and of the Council of 26 
October 2005 on the prevention of the use of the financial system for the purpose of 
money laundering and terrorist financing6 and Commission Directive 2006/70/EC of 1 
August  2006  laying  down  implementing  measures  for  Directive  2005/60/EC  of  the 
European  Parliament  and  of  the  Council  as  regards  the  definition  of  politically 
exposed  person  and  the  technical  criteria  for  simplified  customer  due  diligence 
procedures  and  for  exemption  on  grounds  of  a  financial  activity  conducted  on  an 
occasional or very limited basis7. 

(4)  Money laundering and terrorist financing are frequently carried out in an international 
context.  Measures  adopted  solely  at  national  or  even  European  Union  level,  without 
taking account of international coordination and cooperation, would have very limited 
effects. The measures adopted by the European Union in this field should therefore be 
consistent with other action undertaken in other international fora. The European Union 
action  should  continue  to  take  particular  account  of  the  Recommendations  of  the 
FATF,  which  constitutes  the  foremost  international  body  active  in  the  fight  against 
money  laundering  and  terrorist  financing.  With  the  view  to  reinforce  the  efficacy  of 
the fight against money laundering and terrorist financing, Directives 2005/60/EC and 
2006/70/EC  should  be  aligned  with  the  new  FATF  Recommendations  adopted  and 
expanded in February 2012. 

(5) 

(6) 

Furthermore,  the  misuse  of  the  financial  system  to  channel  criminal  or  even  clean 
money  to  terrorist  purposes  poses  a  clear  risk  to  the  integrity,  proper  functioning, 
reputation and stability of the financial system. Accordingly, the preventive measures 
of this Directive should cover not only the manipulation of money derived from crime 
but also the collection of money or property for terrorist purposes. 

The  use  of  large  cash  payments  is  vulnerable  to  money  laundering  and  terrorist 
financing. In order to increase vigilance and mitigate the risks posed by cash payments 
natural  or  legal  persons  trading  in  goods  should  be  covered  by  this  Directive  to  the 
extent that they make or receive cash payments of EUR 7 500 or more. Member States 
may decide to adopt stricter provisions including a lower threshold. 

(7) 

Legal  professionals,  as  defined  by  the  Member  States,  should  be  subject  to  the 
provisions  of  this  Directive  when  participating  in  financial  or  corporate  transactions, 

4 
5 
6 
7 

OJ L 166, 28.6.1991, p. 77. 
OJ L 344, 28.12.2001, p. 76. 
OJ L 309, 25.11.2005, p. 15. 
OJ L 214, 4.8.2006, p. 29. 

EN 

13 

   EN 

                                                 
including providing tax advice, where there is the greatest risk of the services of those 
legal  professionals  being  misused  for  the  purpose  of  laundering  the  proceeds  of 
criminal activity or for the purpose of terrorist  financing. There should, however, be 
exemptions from any obligation to report information obtained either before, during or 
after judicial proceedings, or in the course of ascertaining the legal position of a client. 
Thus,  legal  advice  should  remain  subject  to  the  obligation  of  professional  secrecy 
unless the legal counsellor is taking part in money laundering or terrorist financing, the 
legal  advice  is  provided  for  money  laundering  or  terrorist  financing  purposes  or  the 
lawyer knows that the client is seeking legal advice for money laundering or terrorist 
financing purposes. 

(8) 

Directly comparable services should be treated in the same manner when provided by 
any of the professionals covered by this Directive. In order to ensure the respect of the 
rights guaranteed by the Charter of Fundamental Rights of the European Union, in the 
case of auditors, external accountants and tax advisors, who, in some Member States, 
may defend or represent a client in the context of judicial proceedings or ascertain a 
client's  legal  position,  the  information  they  obtain  in  the  performance  of  those  tasks 
should not be subject to the reporting obligations in accordance with this Directive. 

(9) 

It  is  important  to  expressly  highlight  that  "tax  crimes"  related  to  direct  and  indirect 
taxes are included in the broad definition of "criminal activity" under this Directive in 
line with the revised FATF Recommendations.  

(10)  There is a need to identify any natural person who exercises ownership or control over 
a legal person. While finding a percentage shareholding will not automatically result 
in  finding  the  beneficial  owner,  it  is  an  evidential  factor  to  be  taken  into  account. 
Identification and verification of beneficial owners should, where relevant, extend to 
legal entities that own other legal entities, and should follow the chain of ownership 
until the natural person who exercises ownership or control of the legal person that is 
the customer is found. 

(11)  The  need  for  accurate  and  up-to-date  information  on  the  beneficial  owner  is  a  key 
factor in tracing criminals who might otherwise hide their identity behind a corporate 
structure. Member States should therefore ensure that companies retain information on 
their  beneficial  ownership  and  make  this  information  available  to  competent 
authorities  and  obliged  entities.  In  addition,  trustees  should  declare  their  status  to 
obliged entities. 

(12)  This Directive should also apply to those activities of the obliged entities covered by 

this Directive which are performed on the internet. 

(13)  The  use  of  the  gambling  sector  to  launder  the  proceeds  of  criminal  activity  is  of 
concern.  In  order  to  mitigate  the  risks  related  to  the  sector  and  to  provide  parity 
amongst  the  providers  of  gambling  services,  an  obligation  for  all  providers  of 
gambling services to conduct customer due diligence for single transactions of EUR 2 
000  or  more  should  be  laid  down.  Member  States  should  consider  applying  this 
threshold  to  the  collection  of  winnings  as  well  as  wagering  a  stake.  Providers  of 
gambling  services  with  physical  premises  (e.g.  casinos  and  gaming  houses)  should 
ensure that customer due diligence, if it is taken at the point of entry to the premises, 
can be linked to the transactions conducted by the customer on those premises. 

EN 

14 

   EN 

(14)  The  risk  of  money  laundering  and  terrorist  financing  is  not  the  same  in  every  case. 
Accordingly, a risk-based approach should be used. The risk-based approach is not an 
unduly permissive option for Member States and obliged entities. It involves the use of 
evidence-based  decision  making  to  better  target  the  money  laundering  and  terrorist 
financing risks facing the European Union and those operating within it. 

(15)  Underpinning  the  risk-based  approach  is  a  need  for  Member  States  to  identify, 
understand  and  mitigate  the  money  laundering  and  terrorist  financing  risks  it  faces. 
The importance of a supra-national approach to risk identification has been recognised 
at  international  level,  and  the  European  Supervisory  Authority  (European  Banking 
Authority) (hereinafter ‘EBA’), established by Regulation (EU) No 1093/2010 of the 
European  Parliament  and  of  the  Council  of  24  November  2010  establishing  a 
European  Supervisory  Authority  (European  Banking  Authority),  amending  Decision 
No  716/2009/EC  and  repealing  Commission  Decision  2009/78/EC8;  the  European 
Supervisory  Authority  (European  Insurance  and  Occupational  Pensions  Authority) 
(hereinafter ‘EIOPA’), established by Regulation (EU) No 1094/2010 of the European 
Parliament  and  of  the  Council  of  24  November  2010  establishing  a  European 
Supervisory  Authority  (European  Insurance  and  Occupational  Pensions  Authority), 
amending  Decision  No  716/2009/EC  and 
repealing  Commission  Decision 
2009/79/EC9;  and  the  European  Supervisory  Authority  (European  Securities  and 
Markets  Authority)  (hereinafter  ‘ESMA’),  established  by  Regulation  (EU)  No 
1095/2010  of  the  European  Parliament  and  of  the  Council  of  24  November  2010 
establishing  a  European  Supervisory  Authority  (European  Securities  and  Markets 
Authority), amending Decision No 716/2009/EC and repealing Commission Decision 
2009/77/EC10,  should  be  tasked  with  issuing  an  opinion  on  the  risks  affecting  the 
financial sector. 

(16)  The  results  of  risk  assessments  at  Member  State  level  should,  where  appropriate,  be 
made available to obliged entities to enable them to identify, understand and mitigate 
their own risks. 

(17) 

In  order  to  better  understand  and  mitigate  risks  at  European  Union  level,  Member 
States  should  share  the  results  of  their  risk  assessments  with  each  other,  the 
Commission and EBA, EIOPA and ESMA, where appropriate. 

(18)  When applying the provisions of this Directive, it is appropriate to take account of the 
characteristics  and  needs  of  small  obliged  entities  which  fall  under  its  scope,  and  to 
ensure a treatment which is appropriate to the specific needs of small obliged entities, 
and the nature of the business. 

(19)  Risk  itself  is  variable  in  nature,  and  the  variables,  either  on  their  own  or  in 
combination, may increase or decrease the potential risk posed, thus having an impact 
on  the  appropriate  level  of  preventative  measures,  such  as  customer  due  diligence 
measures.  Thus,  there  are  circumstances  in  which  enhanced  due  diligence  should  be 
applied and others in which simplified due diligence may be appropriate. 

(20) 

It  should  be  recognised  that  certain  situations  present  a  greater  risk  of  money 
laundering  or  terrorist  financing.  Although  the  identity  and  business  profile  of  all 

8 
9 
10 

OJ L 331, 15.12.2010, p. 12. 
OJ L 331, 15.12.2010, p. 48. 
OJ L 331, 15.12.2010, p. 84. 

EN 

15 

   EN 

                                                 
customers should be established, there are cases where particularly rigorous customer 
identification and verification procedures are required. 

(21)  This is particularly true of business relationships with individuals  holding, or  having 
held, important public positions, particularly those from countries where corruption is 
widespread.  Such  relationships  may  expose  the  financial  sector  in  particular  to 
significant  reputational  and  legal  risks.  The international  effort  to  combat  corruption 
also justifies the need to pay special attention to such cases and to apply appropriate 
enhanced  customer  due  diligence  measures  in  respect  of  persons  who  hold  or  have 
held  prominent  functions  domestically  or  abroad  and  senior  figures  in  international 
organisations. 

(22)  Obtaining  approval  from  senior  management  for  establishing  business  relationships 
need not, in all cases, imply obtaining approval from the board of directors. Granting 
of  such  approval  should  be  possible  by  someone  with  sufficient  knowledge  of  the 
institution's  money  laundering  and  terrorist  financing  risk  exposure  and  sufficient 
seniority to make decisions affecting its risk exposure. 

(23) 

In  order  to  avoid  repeated  customer  identification  procedures,  leading  to  delays  and 
inefficiency  in  business,  it  is  appropriate,  subject  to  suitable  safeguards,  to  allow 
customers whose identification has been carried out elsewhere to be introduced to the 
obliged  entities.  Where  an  obliged  entity  relies  on  a  third  party,  the  ultimate 
responsibility for the customer due diligence procedure remains with the obliged entity 
to whom the customer is introduced. The third party, or the person that has introduced 
the  customer,  should  also  retain  his  own  responsibility  for  compliance  with  the 
requirements  in  this  Directive,  including  the  requirement  to  report  suspicious 
transactions  and  maintain  records,  to  the  extent  that  he  has  a  relationship  with  the 
customer that is covered by this Directive. 

(24) 

In  the  case  of  agency  or  outsourcing  relationships  on  a  contractual  basis  between 
obliged entities and external natural or legal persons not covered by this Directive, any 
anti  money  laundering  and  anti-terrorist  financing  obligations  for  those  agents  or 
outsourcing  service  providers  as  part  of  the  obliged  entities,  may  only  arise  from 
contract  and  not  from  this  Directive.  The  responsibility  for  complying  with  this 
Directive should remain with the obliged entity covered hereby.  

(25)  All  Member  States  have,  or  should,  set  up  financial  intelligence  units  (hereinafter 
referred to as FIUs) to collect and analyse the information which they receive with the 
aim  of  establishing  links  between  suspicious  transactions  and  underlying  criminal 
activity  in  order  to  prevent  and  combat  money  laundering  and  terrorist  financing. 
Suspicious  transactions  should  be  reported  to  the  FIUs,  which  should  serve  as  a 
national centre for receiving, analysing and disseminating to the competent authorities 
suspicious  transaction  reports  and  other  information  regarding  potential  money 
laundering  or  terrorist  financing.  This  should  not  compel  Member  States  to  change 
their  existing  reporting  systems  where  the  reporting  is  done  through  a  public 
prosecutor  or  other  law  enforcement  authorities,  as  long  as  the  information  is 
forwarded  promptly  and  unfiltered  to  FIUs,  allowing  them  to  perform  their  tasks 
properly, including international cooperation with other FIUs. 

(26)  By  way  of  derogation  from  the  general  prohibition  on  executing  suspicious 
transactions, obliged entities may execute suspicious transactions before informing the 

EN 

16 

   EN 

competent  authorities,  where  refraining  from  the  execution  thereof  is  impossible  or 
likely to frustrate efforts to pursue the beneficiaries of a suspected money laundering 
or  terrorist  financing  operation.  This,  however,  should  be  without  prejudice  to  the 
international obligations accepted by the Member States to freeze without delay funds 
or other assets of terrorists, terrorist organisations or those who finance terrorism, in 
accordance with the relevant United Nations Security Council resolutions. 

(27)  Member States should have the possibility to designate an appropriate self-regulatory 
body of the professions referred to in Article 2(1)(3)(a),(b), and (d) as the authority to 
be informed in the first instance in place of the FIU. In line with the case law of the 
European  Court  of  Human  Rights,  a  system  of  first  instance  reporting  to  a  self-
regulatory  body  constitutes  an  important  safeguard  to  uphold  the  protection  of 
fundamental rights as concerns the reporting obligations applicable to lawyers. 

(28)  Where a Member State decides to make use of the exemptions provided for in Article 
33(2),  it  may  allow  or  require  the  self-regulatory  body  representing  the  persons 
referred  to  therein  not  to  transmit  to  the  FIU  any  information  obtained  from  those 
persons in the circumstances referred to in that Article.  

(29)  There have been a number of cases of employees who report their suspicions of money 
laundering being subjected to threats or hostile action. Although this Directive cannot 
interfere  with  Member  States'  judicial  procedures,  this  is  a  crucial  issue  for  the 
effectiveness  of  the  anti-money  laundering  and  anti-terrorist  financing  system. 
Member States should be aware of this problem and should do whatever they can to 
protect employees from such threats or hostile action.  

(30)  Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 
on the protection of individuals with regard to the processing of personal data and on 
the free movement of such data11, as implemented in national law, is applicable to the 
processing of personal data for the purposes of this Directive.  

(31)  Certain aspects of the implementation of this Directive involve the collection, analysis, 
storage  and  sharing  of  data.  The  processing  of  personal  data  should  be  permitted  in 
order  to  comply  with  the  obligations  laid  down  in  this  Directive,  including  carrying 
out  of  customer  due  diligence,  ongoing  monitoring,  investigation  and  reporting  of 
unusual  and  suspicious  transactions,  identification  of  the  beneficial  owner  of  a  legal 
person  or  legal  arrangement,  sharing  of  information  by  competent  authorities  and 
sharing of information by financial institutions. The personal data collected should be 
limited  to  what  is  strictly  necessary  for  the  purpose  of  complying  with  the 
requirements  of  this  Directive  and  not  further  processed  in  a  way  inconsistent  with 
Directive 95/46/EC. In particular, further processing of personal data for commercial 
purposes should be strictly prohibited. 

(32)  The  fight  against  money-laundering  and  terrorist  financing  is  recognised  as  an 

important public interest ground by all Member States. 

(33)  This Directive is without prejudice to the protection of personal data processed in the 
framework  of  police  and  judicial  cooperation  in  criminal  matters,  including  the 
provisions of Framework decision 977/2008/JHA. 

11 

OJ L 281, 23.11.1995, p. 31. 

EN 

17 

   EN 

                                                 
(34)  The rights of access of the data subject are applicable to the personal data processed 
for the purpose of this Directive. However, access by the data subject to information 
contained  in  a  suspicious  transaction  report  would  seriously  undermine  the 
effectiveness of the fight against money laundering and terrorist financing. Limitations 
to this right in accordance with the rules laid down in Article 13 of Directive 95/46/EC 
may therefore be justified. 

(35)  Persons who merely convert paper documents into electronic data and are acting under 
a contract with a credit institution or a financial institution do not fall within the scope 
of this Directive, nor does any natural or legal person that provides credit or financial 
institutions  solely  with  a  message  or  other  support  systems  for  transmitting  funds  or 
with clearing and settlement systems. 

(36)  Money laundering and terrorist financing are international problems and the effort to 
combat  them  should  be  global.  Where  Union  credit  and  financial  institutions  have 
branches and subsidiaries located in third countries where the legislation in this area is 
deficient,  they  should,  in  order  to  avoid  the  application  of  very  different  standards 
within  the  institution  or  group  of  institutions,  apply  Union  standards  or  notify  the 
competent  authorities  of  the  home  Member  State  if  application  of  such  standards  is 
impossible.  

(37)  Feedback  should,  where  practicable,  be  made  available  to  obliged  entities  on  the 
usefulness and follow-up of the suspicious transactions reports they present. To make 
this  possible,  and  to  be  able  to  review  the  effectiveness  of  their  systems  to  combat 
money laundering and terrorist financing Member States should keep and improve the 
relevant statistics. To further enhance the quality and consistency of the statistical data 
collected at Union level, the Commission should keep track of the EU-wide situation 
with respect to the fight against money laundering and terrorist financing and publish 
regular overviews. 

(38)  Competent authorities should ensure that, in regard to currency exchange offices, trust 
and  company  service  providers  or  gambling  service  providers,  the  persons  who 
effectively  direct  the  business  of  such  entities  and  the  beneficial  owners  of  such 
entities are fit and proper persons. The criteria for determining whether or not a person 
is fit and proper should, as a minimum, reflect the need to protect such entities from 
being misused by their managers or beneficial owners for criminal purposes. 

(39)  Taking  into  account  the  transnational  character  of  money  laundering  and  terrorist 
financing, co-ordination and co-operation between EU FIUs are extremely important. 
This co-operation has so far only been addressed by 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  information12.  In 
order to ensure better co-ordination and cooperation between FUIs, and in particular to 
ensure that suspicious transactions reports reach the FIU of the Member State where 
the  report  would  be  of  most  use,  more  detailed,  further  going  and  up-dated  rules 
should be included in this Directive. 

(40) 

Improving  the  exchange  of  information  between  FIUs  within  the  EU  is  of  particular 
importance  to  face  the  transnational  character  of  money  laundering  and  terrorist 

12 

OJ L 271, 24.10.2000, p. 4. 

EN 

18 

   EN 

                                                 
financing. The use of secure facilities for the exchange of information, especially the 
decentralised  computer  network  FIU.net  and  the  techniques  offered  by  that  network 
should be encouraged by Member States. 

(41)  The  importance  of  combating  money  laundering  and  terrorist  financing  should  lead 
Member  States  to  lay  down  effective,  proportionate  and  dissuasive  sanctions  in 
national  law  for  failure  to  respect  the  national  provisions  adopted  pursuant  to  this 
Directive.  Member  States  currently  have  a  diverse  range  of  administrative  measures 
and sanctions for breaches of the key preventative measures. This diversity could be 
detrimental  to  the  efforts  put  in  combating  money  laundering  and  terrorist  financing 
and  the  Union's  response  is  at  risk  of  being  fragmented.  This  Directive  should 
therefore include a range of administrative measures and sanctions that Member States 
shall have available for systematic breaches of the requirements relating to customer 
due  diligence  measures,  record  keeping,  reporting  of  suspicious  transactions  and 
internal controls of obliged entities. This range should be sufficiently broad to allow 
Member States  and  competent authorities to take account of the differences between 
obliged entities, in particular between financial institutions and other obliged entities, 
as  regards  their  size,  characteristics  and  areas  of  activity.  In  the  application  of  this 
Directive, Member States should ensure that the imposition of administrative measures 
and  sanctions  in  accordance  with  this  Directive  and  of  criminal  sanctions  in 
accordance with national law does not breach the principle of ne bis in idem. 

(42)  Technical  standards  in  financial  services  should  ensure  consistent  harmonisation  and 
adequate  protection  of  depositors,  investors  and  consumers  across  the  Union.  As 
bodies  with  highly  specialised  expertise,  it  would  be  efficient  and  appropriate  to 
entrust  EBA,  EIOPA  and  ESMA  with  the  elaboration  of  draft  regulatory  technical 
standards which do not involve policy choices, for submission to the Commission.  

(43)  The  Commission  should  adopt  the  draft  regulatory  technical  standards  developed  by 
EBA,  EIOPA  and  ESMA  pursuant  to  Article  42  of  this  Directive  by  means  of 
delegated  acts  pursuant  to  Article  290  of  the  Treaty  on  the  Functioning  of  the 
European  Union  and  in  accordance  with  Articles  10  to  14  of  Regulation  (EU)  No 
1093/2010, Regulation (EU) No 1094/2010 and Regulation (EU) No 1095/2010.  

(44) 

In view of the very substantial amendments that would need to be made to Directive 
2005/60/EC  and  Directive  2006/70/EC,  they  should  be  merged  and  replaced  for 
reasons of clarity and consistency. 

(45)  Since the objective of this Directive, namely the protection of the financial system by 
means  of  prevention,  investigation  and  detection  of  money  laundering  and  terrorist 
financing,  cannot  be  sufficiently  achieved  by  the  Member  States,  as  individual 
measures  adopted  by  Member  States  to  protect  their  financial  systems  could  be 
inconsistent with the functioning of the internal market and with the prescriptions of 
the rule of law and Union public policy and can therefore, by reason of the scale and 
effects of the action, be better achieved at Union level, the Union may adopt measures, 
in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on 
European Union. In accordance with the principle of proportionality, as set out in that 
Article, this Directive does not go beyond what is necessary in order to achieve that 
objective. 

EN 

19 

   EN 

(46)  This Directive respects the fundamental rights and observes the principles recognised 
by the Charter of Fundamental Rights of the European Union, in particular, the respect 
for  private  and  family  life,  the  right  to  protection  of  personal  data,  the  freedom  to 
conduct a business, the prohibition of discrimination, the right to an effective remedy 
and to a fair trial, and the right of defence. 

(47) 

(48) 

In  line  with  Article  21  of  the  EU  Charter  of  Fundamental  Rights  prohibiting  any 
discrimination based on any ground, Member States have to ensure that this Directive 
is implemented, as regards risk assessments in the context of customer due diligence, 
without discrimination. 

In  accordance  with  the  Joint  Political  Declaration  of  Member  States  and  the 
Commission  of  28  September  2011  on  explanatory  documents,  Member  States  have 
undertaken  to  accompany,  in  justified  cases,  the  notification  of  their  transposition 
measures  with  one  or  more  documents  explaining  the  relationship  between  the 
components  of  a  directive  and  the  corresponding  parts  of  national  transposition 
instruments. With regard to this Directive, the legislator considers the transmission of 
such documents to be justified, 

HAVE ADOPTED THIS DIRECTIVE: 

CHAPTER I 

GENERAL PROVISIONS 

SECTION 1 

SCOPE AND DEFINITIONS 

Article 1 

1. 

2. 

Member  States  shall  ensure  that  money  laundering  and  terrorist  financing  are 
prohibited. 

For  the  purposes  of  this  Directive,  the  following  conduct,  when  committed 
intentionally, shall be regarded as money laundering: 

(a) 

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; 

(b) 

the  concealment  or  disguise  of  the  true  nature,  source,  location,  disposition, 
movement, rights with respect to, or ownership of property, knowing that such 

EN 

20 

   EN 

property  is  derived  from  criminal  activity  or  from  an  act  of  participation  in 
such activity; 

(c) 

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; 

(d)  participation  in,  association  to  commit,  attempts  to  commit  and  aiding, 
abetting,  facilitating  and  counselling  the  commission  of  any  of  the  actions 
referred to in points (a), (b) and (c). 

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. 

For  the  purposes  of  this  Directive,  ‘terrorist  financing’  means  the  provision  or 
collection of funds, by any means, directly or indirectly, with the intention that they 
should be used or in the knowledge that they are to be used, in full or in part, in order 
to  carry  out  any  of  the  offences  within  the  meaning  of  Articles  1  to  4  of  Council 
Framework  Decision  2002/475/JHA  of  13  June  2002  on  combating  terrorism13,  as 
amended by Council Framework Decision 2008/919/JHA of 28 November 200814. 

3. 

4. 

5. 

Knowledge, intent or purpose required as an element of the activities referred to in 
paragraphs 2 and 4 may be inferred from objective factual circumstances. 

1. 

This Directive shall apply to the following obliged entities: 

Article 2 

(1) 

credit institutions; 

(2) 

financial institutions; 

(3) 

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

(a) 

auditors, external accountants and tax advisors; 

(b)  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 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; 

13 
14 

OJ L 164, 22.6.2002, p. 3. 
OJ L 330, 9.12.2008, p. 21-23. 

EN 

21 

   EN 

                                                 
(iv)  organisation  of  contributions  necessary  for  the  creation,  operation 

or management of companies; 

(v) 

creation,  operation  or  management  of  trusts,  companies  or  similar 
structures; 

(c) 

trust or company service providers not already covered under points (a) 
or (b); 

(d) 

real estate agents, including letting agents; 

(e)  other  natural  or  legal  persons  trading  in  goods,  only  to  the  extent  that 
payments  are  made  or  received  in  cash  in  an  amount  of  EUR  7  500  or 
more,  whether  the  transaction  is  executed  in  a  single  operation  or  in 
several operations which appear to be linked; 

(f) 

providers of gambling services. 

2. 

Member States may decide that legal and natural persons, who engage in a financial 
activity  on  an  occasional  or  very  limited  basis  where  there  is  little  risk  of  money 
laundering  or  terrorist  financing  occurring,  do  not  fall  within  the  scope  of  this 
Directive provided that the legal or natural person fulfils all of the following criteria: 

(a) 

the financial activity is limited in absolute terms; 

(b) 

the financial activity is limited on a transaction basis; 

(c) 

the financial activity is not the main activity; 

(d) 

the financial activity is ancillary and directly related to the main activity; 

(e) 

(f) 

the  main  activity  is  not  an  activity  mentioned  in  paragraph  1,  with  the 
exception of the activity referred to in point (3)(e) of paragraph 1; 

the financial activity is provided only to the customers of the main activity and 
is not generally offered to the public. 

The previous subparagraph shall not apply to the legal and natural persons engaged 
in the activity of money remittance within the meaning of Article 4(13) of Directive 
2007/64/EC of the European Parliament and of the Council of 13 November 2007 on 
payment services in the internal market amending Directives 97/7/EC, 2002/65/EC, 
2005/60/EC and 2006/48/EC and repealing Directive 97/5/EC15. 

For  the  purposes  of  point  (a)  of  paragraph  2,  Member  States  shall  require  that  the 
total  turnover  of  the  financial  activity  may  not  exceed  a  threshold  which  must  be 
sufficiently low. That threshold shall be established  at  national level, depending on 
the type of financial activity. 

For the purposes of point (b) of paragraph 2, Member States shall apply a maximum 
threshold per customer and single transaction, whether the transaction is carried out 
in  a  single  operation  or  in  several  operations  which  appear  to  be  linked.  That 

3. 

4. 

15 

OJ L 319, 5.12.2007, p. 1. 

EN 

22 

   EN 

                                                 
threshold  shall  be  established  at  national  level,  depending  on  the  type  of  financial 
activity. It shall be sufficiently low in order to ensure that the types of transactions in 
question  are  an  impractical  and  inefficient  method  for  laundering  money  or  for 
terrorist financing, and shall not exceed EUR 1 000. 

For  the  purposes  of  point  (c)  of  paragraph  2,  Member  States  shall  require  that  the 
turnover  of  the  financial  activity  does  not  exceed  5  %  of  the  total  turnover  of  the 
legal or natural person concerned. 

In  assessing  the  risk  of  money  laundering  or  terrorist  financing  occurring  for  the 
purposes  of  this  Article,  Member  States  shall  pay  special  attention  to  any  financial 
activity which is regarded as particularly likely, by its nature, to be used or abused 
for money laundering or terrorist financing purposes. 

Any  decision  pursuant  to  this  Article  shall  state  the  reasons  on  which  it  is  based. 
Member States shall provide for the possibility of withdrawing that decision should 
circumstances change. 

Member  States  shall  establish  risk-based  monitoring  activities  or  take  any  other 
adequate measures to ensure that the exemption granted by decisions pursuant to this 
Article is not abused. 

5. 

6. 

7. 

8. 

Article 3 

For the purposes of this Directive the following definitions shall apply: 

(1) 

"credit institution" means a credit institution, as defined in Article 4(1) of Directive 
2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating 
to the taking up and pursuit of the business of credit institutions16, including branches 
within the meaning of Article 4(3) of that Directive located in the European Union of 
credit institutions having their head offices inside or outside the European Union; 

(2) 

"financial institution" means:  

(a) 

(b) 

(c) 

an undertaking, other than a credit institution, which carries out one or more of 
the operations included in points 2 to 12  and  points  14  and  15  of  Annex  I  to 
Directive  2006/48/EC,  including  the  activities  of  currency  exchange  offices 
(bureaux de change);  

insurance  company  duly  authorised 

an 
in  accordance  with  Directive 
2002/83/EC  of  the  European  Parliament  and  of  the  Council  of  5  November 
2002 concerning life assurance17, insofar as it carries out activities covered by 
that Directive;  

an  investment  firm  as  defined  in  point  1  of  Article  4(1)  of  Directive 
2004/39/EC  of  the  European  Parliament and  of  the  Council  of  21  April  2004 
on markets in financial instruments18; 

16 
17 
18 

OJ L 177, 30.6.2006, p. 1. 
OJ L 345, 19.12.2002, p. 1. 
OJ L 145, 30.4.2004, p. 1. 

EN 

23 

   EN 

                                                 
(3) 

(4) 

(d) 

a collective investment undertaking marketing its units or shares; 

(e) 

an  insurance  intermediary  as  defined  in  Article  2(5)  of  Directive  2002/92/EC 
of  the  European  Parliament  and  of  the  Council  of  9  December  2002  on 
insurance  mediation19,  with  the  exception  of  intermediaries  as  mentioned  in 
Article  2(7)  of  that  Directive,  when  they  act  in  respect  of  life  insurance  and 
other investment related services; 

(f) 

branches,  when  located  in  the  European  Union,  of  financial  institutions  as 
referred  to  in  points  (a)  to  (e),  whose  head  offices  are  inside  or  outside  the 
European Union; 

"property" means assets of every kind, whether corporeal or incorporeal, movable or 
immovable, tangible or intangible,  and legal documents or instruments  in  any form 
including electronic or digital, evidencing title to or an interest in such assets; 

"criminal activity" means any kind of criminal involvement in the commission of the 
following serious crimes: 

(a) 

(b) 

(c) 

(d) 

acts  as  defined  in  Articles  1  to  4  of  Framework  Decision  2002/475/JHA  on 
terrorism,  as  amended  by  Council  Framework  Decision 
combatting 
2008/919/JHA of 28 November 2008; 

any  of  the  offences  referred  in  Article  3(1)(a)  of  the  1988  United  Nations 
Convention  against  Illicit  Traffic  in  Narcotic  Drugs  and  Psychotropic 
Substances; 

the activities of criminal organisations as defined in Article 1 of Council Joint 
Action  98/733/JHA  of  21  December  1998  on  making  it  a  criminal  offence  to 
participate  in  a  criminal  organisation  in  the  Member  States  of  the  European 
Union20; 

fraud  affecting  the  Union's  financial  interests,  at  least  serious,  as  defined  in 
Article 1(1) and Article 2 of the Convention on the Protection of the European 
Communities' Financial Interests21; 

(e) 

corruption; 

(f) 

all  offences,  including  tax  crimes  related  to  direct  taxes  and  indirect  taxes, 
which  are  punishable  by  deprivation  of  liberty  or  a  detention  order  for  a 
maximum  of  more  than  one  year  or,  as  regards  those  States  which  have  a 
minimum threshold for offences in their legal system, all offences punishable 
by deprivation of liberty or a detention order for a minimum of more than six 
months; 

(5) 

"beneficial owner" means any 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. The beneficial owner shall at least include: 

19 
20 
21 

OJ L 9, 15.1.2003, p. 3. 
OJ L 351, 29.12.1998, p. 1. 
OJ C 316, 27.11.1995, p. 49. 

EN 

24 

   EN 

                                                 
(a) 

in the case of corporate entities: 

(i) 

the  natural  person(s)  who  ultimately  owns  or  controls  a  legal  entity 
through  direct  or  indirect  ownership  or  control  over  a  sufficient 
percentage  of  the  shares  or  voting  rights  in  that  legal  entity,  including 
through bearer share holdings, other than a company listed on a regulated 
market  that  is  subject  to  disclosure  requirements  consistent  with 
European  Union  legislation  or  subject  to  equivalent  international 
standards. 

A  percentage  of  25%  plus  one  share  shall  be  evidence  of  ownership  or 
control  through  shareholding  and  applies  to  every  level  of  direct  and 
indirect ownership; 

(ii) 

if  there  is  any  doubt  that  the  person(s)  identified  in  point  (i)  are  the 
beneficial owner(s), the natural person(s) who exercises control over the 
management of a legal entity through other means; 

(b) 

in the case of legal entities, such as foundations, and legal arrangements, such 
as trusts, which administer and distribute funds: 

(i) 

the  natural  person(s)  who  exercises  control  over  25  %  or  more  of  the 
property of a legal arrangement or entity; and 

(ii)  where the future beneficiaries have already been determined, the natural 
person(s)  who  is  the  beneficiary  of  25  %  or  more  of  the  property  of  a 
legal arrangement or entity; or 

(iii)  where  the  individuals  that  benefit  from  the  legal  arrangement  or  entity 
have yet to be determined, the class of persons in whose main interest the 
legal  arrangement  or  entity  is  set  up  or  operates.  For  beneficiaries  of 
trusts  that  are  designated  by  characteristics  or  by  class,  obliged  entities 
shall  obtain  sufficient  information  concerning  the  beneficiary  to  satisfy 
itself that it will be able to establish the identity of the beneficiary at the 
time  of  the  payout  or  when  the  beneficiary  intends  to  exercise  vested 
rights; 

(6) 

"trust  or  company  service  providers"  means  any  natural  or  legal  person  which  by 
way of business provides any of the following services to third parties: 

(a) 

forming companies or other legal persons; 

(b) 

acting as or arranging for another person to act as a director or secretary of a 
company,  a  partner  of  a  partnership,  or  a  similar  position  in  relation  to  other 
legal persons; 

(c)  providing  a 

registered  office,  business  address,  correspondence  or 
administrative address and other related services for a company, a partnership 
or any other legal person or arrangement; 

(d) 

acting as or arranging for another person to act as a trustee of an express trust 
or a similar legal arrangement; 

EN 

25 

   EN 

(e) 

acting  as  or  arranging  for  another  person  to  act  as  a  nominee  shareholder  for 
another  person  other  than  a  company  listed  on  a  regulated  market  that  is 
subject  to  disclosure  requirements  in  conformity  with  European  Union 
legislation or subject to equivalent international standards; 

(7) 

(a) 

"foreign  politically  exposed  persons"  means  natural  persons  who  are  or  have 
been entrusted with prominent public functions by a third country; 

(b) 

(c) 

"domestic politically exposed persons" means natural persons who are or who 
have been entrusted by a Member State with prominent public functions; 

"persons who are or who have been entrusted with a prominent function by an 
international  organisation"  means  directors,  deputy  directors  and  members  of 
the board or equivalent function of an international organisation; 

(d) 

"natural  persons  who  are  or  have  been  entrusted  with  prominent  public 
functions" shall include the following: 

(i) 

heads  of  State,  heads  of  government,  ministers  and  deputy  or  assistant 
ministers; 

(ii)  members of parliaments; 

(iii)  members  of  supreme  courts,  of  constitutional  courts  or  of  other  high-
level  judicial  bodies  whose  decisions  are  not  subject  to  further  appeal, 
except in exceptional circumstances; 

(iv)  members of courts of auditors or of the boards of central banks; 

(v) 

ambassadors,  chargés  d'affaires  and  high-ranking  officers  in  the  armed 
forces; 

(vi)  members  of  the  administrative,  management  or  supervisory  bodies  of 

State owned enterprises. 

None  of  the  categories  set  out  in  points  (i)  to  (vi)  shall  be  understood  as 
covering middle ranking or more junior officials; 

(e) 

"family members" shall include the following: 

(i) 

the spouse; 

(ii) 

any partner considered as equivalent to the spouse; 

(iii) 

the children and their spouses or partners; 

(iv) 

the parents; 

(f) 

"persons known to be close associates" shall include the following: 

(i) 

any  natural  person  who  is  known  to  have  joint  beneficial  ownership  of 
legal entities or legal arrangements, or any other close business relations, 
with a person referred to in points (7)(a) to (7)(d) above; 

EN 

26 

   EN 

 
(ii) 

any natural person who has sole beneficial ownership of a legal entity or 
legal arrangement which is known to have been set up for the benefit de 
facto of the person referred to in points (7)(a) to (7)(d) above; 

"senior management" means an officer or employee with sufficient knowledge of the 
institution's  money  laundering  and  terrorist  financing  risk  exposure  and  sufficient 
seniority  to  make  decisions  affecting  its  risk  exposure.  It  need  not,  in  all  cases, 
involve a member of the board of directors; 

"business  relationship"  means  a  business,  professional  or  commercial  relationship 
which is connected with the professional activities of the obliged entities and which 
is  expected,  at  the  time  when  the  contact  is  established,  to  have  an  element  of 
duration; 

"gambling  services"  means  any  service  which  involves  wagering  a  stake  with 
monetary value in games of chance including those with an element of skill such as 
lotteries, casino games, poker games and betting transactions that are provided at a 
physical  location,  or  by  any  means  at  a  distance,  by  electronic  means  or  any  other 
technology  for  facilitating  communication,  and  at  the  individual  request  of  a 
recipient of services; 

"group" has the meaning given to it in Article 2(12) of Directive 2002/87/EC of the 
European Parliament and of the Council of 16 December 2002 on the supplementary 
supervision  of  credit  institutions,  insurance  undertakings  and  investment  firms  in  a 
financial conglomerate22.  

Article 4 

Member  States  shall  ensure  that  the  provisions  of  this  Directive  are  extended  in 
whole  or  in  part  to  professions  and  to  categories  of  undertakings,  other  than  the 
obliged  entities  referred  to  in  Article  2(1),  which  engage  in  activities  which  are 
particularly likely to be used for money laundering or terrorist financing purposes. 

Where  a  Member  State  decides  to  extend  the  provisions  of  this  Directive  to 
professions and to categories of undertakings other than those referred to in Article 
2(1), it shall inform the Commission thereof. 

(8) 

(9) 

(10) 

(11) 

1. 

2. 

The Member States may adopt or retain in force stricter provisions in the field covered by this 
Directive to prevent money laundering and terrorist financing. 

Article 5 

22 

OJ L 35, 11.2.2003, p. 1. 

EN 

27 

   EN 

                                                 
SECTION 2 

RISK ASSESSMENT 

Article 6 

1. 

2. 

1. 

2. 

3. 

4. 

The  European  Banking  Authority  (hereinafter  "EBA"),  European  Insurance  and 
Occupational Pensions Authority (hereinafter "EIOPA") and European Securities and 
Markets Authority (hereinafter "ESMA") shall provide a joint opinion on the money 
laundering and terrorist financing risks affecting the internal market.  

The opinion shall be provided within 2 years from the date of entry into force of this 
Directive. 

The  Commission  shall  make  the  opinion  available  to  assist  Member  States  and 
obliged  entities  to  identify,  manage  and  mitigate  the  risk  of  money  laundering  and 
terrorist financing. 

Article 7 

Each  Member  State  shall  take  appropriate  steps  to  identify,  assess,  understand  and 
mitigate the money laundering and terrorist financing risks affecting it, and keep the 
assessment up-to-date.  

Each Member State shall designate an authority to co-ordinate the national response 
to the risks referred to in paragraph 1. The identity of that authority shall be notified 
to the Commission, EBA, EIOPA and ESMA and other Member States. 

In carrying out the assessments referred to in paragraph 1, Member States may make 
use of the opinion referred to in Article 6(1). 

Each Member State shall carry out the assessment referred to in paragraph 1 and: 

(a)  use  the  assessment(s)  to  improve  its  anti-money  laundering  and  combating 
terrorist financing regime, in particular by identifying any areas where obliged 
entities shall apply enhanced measures and, where appropriate, specifying the 
measures to be taken; 

(b)  use the assessment(s) to assist it in the allocation and prioritisation of resources 

to combat money laundering and terrorist financing; 

(c)  make  appropriate  information  available  to  obliged  entities  to  carry  out  their 

own money laundering and terrorist financing risk assessments. 

5. 

Member States shall make the results of their risk assessments available to the other 
Member States, the Commission, and EBA, EIOPA and ESMA upon request. 

EN 

28 

   EN 

Article 8 

1. 

2. 

3. 

Member States shall ensure that obliged entities take appropriate steps to identify and 
assess  their  money  laundering  and  terrorist  financing  risks  taking  into  account  risk 
factors  including  customers,  countries  or  geographic  areas,  products,  services, 
transactions or delivery channels. These steps shall be proportionate to the nature and 
size of the obliged entities. 

The assessments referred to in paragraph 1 shall be documented, kept up to date and 
be made available to competent authorities and self-regulatory bodies.  

Member  States  shall  ensure  that  obliged  entities  have  policies,  controls  and 
procedures  to  mitigate  and  manage  effectively  the  money  laundering  and  terrorist 
financing  risks  identified  at  Union  level,  Member  State  level,  and  at  the  level  of 
obliged  entities.  Policies,  controls  and  procedures  should  be  proportionate  to  the 
nature and size of those obliged entities. 

4. 

The policies and procedures referred to in paragraph 3 shall at least include: 

(a) 

the  development  of  internal  policies,  procedures  and  controls,  including 
customer due diligence, reporting, record keeping, internal control, compliance 
management  (including,  when  appropriate  to  the  size  and  nature  of  the 
business,  the  appointment  of  a  compliance  officer  at  management  level)  and 
employee screening; 

(b)  when  appropriate  with  regard  to  the  size  and  nature  of  the  business,  an 
independent  audit  function  to  test  internal  policies,  procedures  and  controls 
referred to in point (a). 

5. 

Member  States  shall  require  obliged  entities  to  obtain  approval  from  senior 
management for the policies and procedures they put in place, and shall monitor and 
enhance the measures taken, where appropriate. 

CHAPTER II 

CUSTOMER DUE DILIGENCE 

SECTION 1 

GENERAL PROVISIONS 

Article 9 

Member States shall prohibit their credit and financial institutions from keeping anonymous 
accounts or anonymous passbooks. Member States shall in all cases require that the owners 
and  beneficiaries  of  existing  anonymous  accounts  or  anonymous  passbooks  be  made  the 

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subject of customer due diligence measures as soon as possible and in any event before such 
accounts or passbooks are used in any way. 

Article 10 

Member States shall ensure that obliged entities apply customer due diligence measures in the 
following cases: 

(a) 

(b) 

(c) 

(d) 

(e) 

(f) 

when establishing a business relationship; 

when  carrying  out  occasional  transactions  amounting  to  EUR  15  000  or  more, 
whether  the  transaction  is  carried  out  in  a  single  operation  or  in  several  operations 
which appear to be linked; 

for  natural  or  legal  persons  trading  in  goods,  when  carrying  out  occasional 
transactions  in  cash  amounting  to  EUR  7  500  or  more,  whether  the  transaction  is 
carried out in a single operation or in several operations which appear to be linked; 

for  providers  of  gambling  services,  when  carrying  out  occasional  transactions 
amounting to EUR 2 000 or more, whether the transaction is carried out in a single 
operation or in several operations which appear to be linked;  

when  there  is  a  suspicion  of  money  laundering  or  terrorist  financing,  regardless  of 
any derogation, exemption or threshold; 

when  there  are  doubts  about  the  veracity  or  adequacy  of  previously  obtained 
customer identification data. 

1. 

Customer due diligence measures shall comprise: 

Article 11 

(a) 

(b) 

(c) 

(d) 

identifying  the  customer  and  verifying  the  customer's  identity  on  the  basis  of 
documents,  data  or  information  obtained  from  a  reliable  and  independent 
source; 

identifying  the  beneficial  owner  and  taking  reasonable  measures  to  verify  his 
identity  so  that  the  institution  or  person  covered  by  this  Directive  is  satisfied 
that it knows who the beneficial owner is, including, as regards legal persons, 
trusts and similar legal arrangements, taking reasonable measures to understand 
the ownership and control structure of the customer; 

assessing  and,  as  appropriate,  obtaining  information  on  the  purpose  and 
intended nature of the business relationship; 

conducting ongoing monitoring of the business relationship including scrutiny 
of transactions undertaken throughout the course of that relationship to ensure 
that  the  transactions  being  conducted  are  consistent  with  the  institution's  or 
person's  knowledge  of  the  customer,  the  business  and  risk  profile,  including, 
where necessary, the source of funds and ensuring that the documents, data or 
information held are kept up-to-date. 

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2. 

3. 

4. 

5. 

1. 

2. 

3. 

Member  States  shall  ensure  that  obliged  entities  apply  each  of  the  customer  due 
diligence requirements set out in paragraph 1, but may determine the extent of such 
measures on a risk-sensitive basis. 

When assessing money laundering and terrorist financing risks, Member States shall 
require obliged entities to take into account at least the variables set out in Annex I. 

Member States shall ensure that obliged entities are able to demonstrate to competent 
authorities or self-regulatory bodies that the measures are appropriate in view of the 
risks of money laundering and terrorist financing that have been identified. 

For life or other investment-related insurance business, Member States shall ensure 
that  financial  institutions  shall,  in  addition  to  the  customer  due  diligence  measures 
required for the customer and the beneficial owner, conduct the following customer 
due  diligence  measures  on  the  beneficiaries  of  life  insurance  and  other  investment 
related insurance policies, as soon as the beneficiaries are identified or designated: 

(a) 

(b) 

for  beneficiaries  that  are  identified  as  specifically  named  natural  or  legal 
persons or legal arrangements, taking the name of the person; 

for  beneficiaries  that  are  designated  by  characteristics  or  by  class  or  by  other 
means,  obtaining  sufficient  information  concerning  those  beneficiaries  to 
satisfy the financial institution that it will be able to establish the identity of the 
beneficiary at the time of the payout. 

For both the cases referred to in points (a) and (b), the verification of the identity of 
the  beneficiaries  shall  occur  at  the  time  of  the  payout.  In  case  of  assignment,  in 
whole  or  in  part,  of  the  life  or  other  investment  related  insurance  to  a  third  party, 
financial  institutions  aware  of  the  assignment  shall  identify  the  beneficial  owner  at 
the  time  of  the  assignment  to  the  natural  or  legal  person  or  legal  arrangement 
receiving for own benefit the value of the policy assigned. 

Article 12 

Member States shall require that the verification of the identity of the customer and 
the beneficial owner takes place before the establishment of a business relationship 
or the carrying-out of the transaction. 

By way of derogation from paragraph 1, Member States may allow the verification 
of the identity of the customer and the beneficial owner to be completed during the 
establishment  of  a  business  relationship  if  this  is  necessary  not  to  interrupt  the 
normal  conduct  of  business  and  where  there  is  little  risk  of  money  laundering  or 
terrorist financing occurring. In such situations these procedures shall be completed 
as soon as practicable after the initial contact. 

By  way  of  derogation  from  paragraphs  1  and  2,  Member  States  may  allow  the 
opening  of  a  bank  account  provided  that  there  are  adequate  safeguards  in  place  to 
ensure that transactions are not carried out by the customer or on its behalf until full 
compliance with paragraphs 1 and 2 is obtained. 

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4. 

Member States shall require that, where the institution or person concerned is unable 
to  comply  with  points  (a),  (b)  and  (c)  of  Article  11(1),  it  shall  not  carry  out  a 
transaction through a bank account, establish a business relationship or carry out the 
transaction,  and  shall  consider  terminating  the  business  relationship  and  making  a 
suspicious  transaction  report  to  the  financial  intelligence  unit  (FIU)  in  accordance 
with Article 32 in relation to the customer. 

Member  States  shall  not  apply  the  previous  subparagraph  to,  notaries,  other 
independent legal professionals, auditors, external accountants and tax advisors only 
to the strict extent that such exemption relates to ascertaining the legal position for 
their  client  or  performing  their  task  of  defending  or  representing  that  client  in,  or 
concerning  judicial  proceedings,  including  advice  on  instituting  or  avoiding 
proceedings. 

5. 

Member  States  shall  require  that  obliged  entities  apply  the  customer  due  diligence 
procedures  not  only  to  all  new  customers  but  also  at  appropriate  times  to  existing 
customers  on  a  risk-sensitive  basis,  including  at  times  when  the  relevant 
circumstances of a customer change. 

SECTION 2 

SIMPLIFIED CUSTOMER DUE DILIGENCE 

Article 13 

1. 

2. 

3. 

Where  a  Member  State  or  an  obliged  entity  identifies  areas  of  lower  risk,  that 
Member State may allow obliged entities to apply simplified customer due diligence 
measures. 

Before  applying  simplified  customer  due  diligence  measures  obliged  entities  shall 
ascertain that the customer relationship or transaction presents a lower degree of risk.  

Member  States  shall  ensure  that  obliged  entities  carry  out  sufficient  monitoring  of 
the  transaction  or  business  relationship  to  enable  the  detection  of  unusual  or 
suspicious transactions. 

Article 14 

When  assessing  the  money  laundering  and  terrorist  financing  risks  relating  to  types  of 
customers,  countries  or  geographic  areas,  and  particular  products,  services,  transactions  or 
delivery  channels,  Member  States  and  obliged  entities  shall  take  into  account  at  least  the 
factors of potentially lower risk situations set out in Annex II. 

EBA,  EIOPA  and  ESMA  shall  issue  guidelines  addressed  to  competent  authorities  and  the 
obliged  entities  referred  to  in  Article  2(1)(1)  and  (2)  in  accordance  with  Article  16  of 

Article 15 

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Regulation (EU) No 1093/2010, of Regulation (EU) No 1094/2010, and of Regulation (EU) 
No  1095/2010,  on  the  risk  factors  to  be  taken  into  consideration  and/or  the  measures  to  be 
taken in situations where simplified due diligence measures are appropriate. Specific account 
should  be  taken  of  the  nature  and  size  of  the  business,  and  where  appropriate  and 
proportionate, specific measures should be foreseen. These guidelines shall be issued within 2 
years of the date of entry into force of this Directive. 

SECTION 3 

ENHANCED CUSTOMER DUE DILIGENCE 

1. 

2. 

3. 

4. 

Article 16 

In cases identified in Articles 17 to 23 of this Directive and in other cases of higher 
risks  that  are  identified  by  Member  States  or  obliged  entities,  Member  States  shall 
require  obliged  entities  to  apply  enhanced  customer  due  diligence  measures  to 
manage and mitigate those risks appropriately. 

Member  States  shall  require  obliged  entities  to  examine,  as  far  as  reasonably 
possible, the background and purpose of all complex, unusual large transactions, and 
all  unusual  patterns  of  transactions,  which  have  no  apparent  economic  or  lawful 
purpose. In particular, they shall increase the degree and nature of monitoring of the 
business  relationship,  in  order  to  determine  whether  those  transactions  or  activities 
appear unusual or suspicious. 

When  assessing  the  money  laundering  and  terrorist  financing  risks,  Member  States 
and obliged entities shall take into account at least the factors of potentially higher-
risk situations set out in Annex III. 

EBA,  EIOPA  and  ESMA  shall  issue  guidelines  addressed  to  competent  authorities 
and the obliged entities referred to Article 2(1)(1) and (2) in accordance with Article 
16  of  Regulation  (EU)  No  1093/2010,  of  Regulation  (EU)  No  1094/2010,  and  of 
Regulation  (EU)  No  1095/2010  on  the  risk  factors  to  be  taken  into  consideration 
and/or the measures to be taken in situations where enhanced due diligence measures 
need  to  be  applied.  Those  guidelines  shall  be  issued  within  2  years  of  the  date  of 
entry into force of this Directive. 

Article 17 

In  respect  of  cross-frontier  correspondent  banking  relationships  with  respondent  institutions 
from third countries, Member States shall, in addition to the customer due diligence measures 
as set out in Article 11, require their credit institutions to: 

(a) 

gather  sufficient  information  about  a  respondent  institution  to  understand  fully  the 
nature  of  the  respondent's  business  and  to  determine  from  publicly  available 
information the reputation of the institution and the quality of supervision; 

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(b) 

(c) 

(d) 

(e) 

assess the respondent institution's anti-money laundering and anti-terrorist financing 
controls; 

obtain  approval  from  senior  management  before  establishing  new  correspondent 
banking relationships; 

document the respective responsibilities of each institution; 

with  respect  to  payable-through  accounts,  be  satisfied  that  the  respondent  credit 
institution  has  verified  the  identity  of  and  performed  ongoing  due  diligence  on  the 
customers having direct access to accounts of the correspondent and that it is able to 
provide  relevant  customer  due  diligence  data  to  the  correspondent  institution,  upon 
request. 

Article 18 

In  respect  of  transactions  or  business  relationships  with  foreign  politically  exposed  persons, 
Member States shall, in addition to the customer due diligence measures set out in Article 11, 
require obliged entities to: 

(a) 

(b) 

(c) 

have  appropriate  risk-based  procedures  to  determine  whether  the  customer  or  the 
beneficial owner of the customer is such a person; 

obtain  senior  management  approval  for  establishing  or  continuing  business 
relationships with such customers; 

take adequate measures to establish the source of wealth and source of funds that are 
involved in the business relationship or transaction; 

(d) 

conduct enhanced ongoing monitoring of the business relationship. 

Article 19 

In respect of transactions or business relationships with domestic politically exposed persons 
or  a  person  who  is  or  has  been  entrusted  with  a  prominent  function  by  an  international 
organisation, Member States shall, in addition to the customer due diligence measures set out 
in Article 11, require obliged entities: 

(a) 

(b) 

to have appropriate risk-based procedures to determine whether the customer or the 
beneficial owner of the customer is such a person; 

in  cases  of  higher  risk  business  relationships  with  such  persons,  to  apply  the 
measures referred to in points (b), (c) and (d) of Article 18. 

Article 20 

Obliged  entities  shall  take  reasonable  measures  to  determine  whether  the  beneficiaries  of  a 
life or other investment related insurance policy and/or, where required, the beneficial owner 
of the beneficiary are politically exposed persons. Those measures shall be taken at the latest 
at the time of the payout or at the time of the assignment, in whole or in part, of the policy. 

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Where there are higher risks identified, in addition to taking normal customer due diligence 
measures, Member States shall require obliged entities to: 

(a) 

(b) 

inform senior management before the payout of the policy proceeds; 

conduct enhanced scrutiny on the whole business relationship with the policyholder. 

The  measures  referred  to  in  Articles  18,  19  and  20  shall  also  apply  to  family  members  or 
persons known to be close associates of such politically exposed persons. 

Article 21 

Article 22 

Where  a  person  referred  to  in  Articles  18,  19  and  20  has  ceased  to  be  entrusted  with  a 
prominent public function by a Member State or a third country or with a prominent function 
by an international organisation, obliged entities shall be required to consider the continuing 
risk posed by that person and to apply such appropriate and risk-sensitive measures until such 
time as that person is deemed to pose no further risk. This period of time shall not be less than 
18 months. 

Article 23 

1. 

2. 

Member  States  shall  prohibit  credit  institutions  from  entering  into  or  continuing  a 
correspondent  banking  relationship  with  a  shell  bank  and  shall  require  that  credit 
institutions  take  appropriate  measures  to  ensure  that  they  do  not  engage  in  or 
continue correspondent banking relationships with a bank that is known to permit its 
accounts to be used by a shell bank. 

For  the  purposes  of  paragraph  1,  "shell  bank"  shall  mean  a  credit  institution,  or  an 
institution engaged in equivalent activities, incorporated in a jurisdiction in which it 
has no physical presence, involving meaningful mind and management, and which is 
unaffiliated with a regulated financial group. 

SECTION 4 

PERFORMANCE BY THIRD PARTIES 

Article 24 

Member  States  may  permit  the  obliged  entities  to  rely  on  third  parties  to  meet  the 
requirements laid down in Article 11(1)(a), (b) and (c). However, the ultimate responsibility 
for meeting those requirements shall remain with the obliged entity which relies on the third 
party. 

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1. 

2. 

1. 

2. 

Article 25 

For the purposes of this Section, "third parties" shall mean obliged entities who are 
listed  in  Article  2,  or  other  institutions  and  persons  situated  in  Member  States  or  a 
third  country,  who  apply  customer  due  diligence  requirements  and  record  keeping 
requirements  equivalent  to  those  laid  down  in  this  Directive  and  their  compliance 
with the requirements of this Directive is supervised in accordance with Section 2 of 
Chapter VI. 

The Member States shall consider information available on the level of geographical 
risk when deciding if a third country meets the conditions laid down in paragraph 1 
and  shall  inform  each  other,  the  Commission  and  EBA,  EIOPA  and  ESMA  to  the 
extent relevant for the purposes of this Directive and in accordance with the relevant 
provisions  of  Regulation  (EU)  No  1093/2010,  of  Regulation  (EU)  No  1094/2010, 
and  of  Regulation  (EU)  No  1095/2010,  of  cases  where  they  consider  that  a  third 
country meets such conditions. 

Article 26 

Member  States  shall  ensure  that  obliged  entities  obtain  from  the  third  party  being 
relied  upon  the  necessary  information  concerning  the  requirements  laid  down  in 
Article 11(1)(a), (b) and (c). 

Member  States  shall  ensure  that  obliged  entities  to  which  the  customer  is  being 
referred  take  adequate  steps  to  ensure  that  relevant  copies  of  identification  and 
verification data and other relevant documentation on the identity of the customer or 
the beneficial owner are immediately forwarded, on request, by the third party. 

Article 27 

Member States shall ensure that the home competent authority (for group-wide policies and 
controls) and the host competent authority (for branches and subsidiaries) may consider that 
an  obliged  entity  applies  the  measures  contained  in  Article  25(1)  and  26  through  its  group 
programme, where the following conditions are fulfilled: 

(a) 

(b) 

(c) 

an  obliged  entity  relies  on  information  provided  by  a  third  party  that  is  part  of  the 
same group; 

that  group  applies  customer  due  diligence  measures,  rules  on  record  keeping  and 
programmes against money laundering and terrorist financing in accordance with this 
Directive or equivalent rules; 

the effective implementation of requirements referred to in point (b) is supervised at 
group level by a competent authority. 

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Article 28 

This Section shall not apply to outsourcing or agency relationships where, on the basis of a 
contractual arrangement, the outsourcing service provider or agent is to be regarded as part of 
the obliged entity. 

CHAPTER III 

BENEFICIAL OWNERSHIP INFORMATION 

1. 

2. 

1. 

2. 

3. 

4. 

Article 29 

Member  States  shall  ensure  that  corporate  or  legal  entities  established  within  their 
territory  obtain  and  hold  adequate,  accurate  and  current  information  on  their 
beneficial ownership. 

Member  States  shall  ensure  that  the  information  referred  to  in  paragraph  1  of  this 
Article can be accessed in a timely manner by competent authorities and by obliged 
entities. 

Article 30 

Member  States  shall  ensure  that  trustees  of  any  express  trust  governed  under  their 
law  obtain  and  hold  adequate,  accurate  and  current  information  on  beneficial 
ownership  regarding  the  trust.  This  information  shall  include  the  identity  of  the 
settlor, of the trustee(s), of the protector (if relevant), of the beneficiaries or class of 
beneficiaries,  and  of  any  other  natural  person  exercising  effective  control  over  the 
trust. 

Member States shall ensure that trustees disclose their status to obliged entities when, 
as  a  trustee,  the  trustee  forms  a  business  relationship  or  carries  out  an  occasional 
transaction above the threshold set out in points (b), (c) and (d) of Article 10. 

Member  States  shall  ensure  that  the  information  referred  to  in  paragraph  1  of  this 
Article can be accessed in a timely manner by competent authorities and by obliged 
entities. 

Member States shall ensure that measures corresponding to those in paragraphs 1, 2 
and  3  apply  to  other  types  of  legal  entity  and  arrangement  with  a  similar  structure 
and function to trusts. 

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CHAPTER IV 

REPORTING OBLIGATIONS 

SECTION 1 

GENERAL PROVISIONS 

Article 31 

Each Member State shall establish an FIU in order to prevent, detect and investigate 
money laundering and terrorist financing. 

Member States shall notify the Commission in writing of the name and address of the 
respective FIUs. 

The  FIU  shall  be  established  as  a  central  national  unit.  It  shall  be  responsible  for 
receiving  (and  to  the  extent  permitted,  requesting),  analysing  and  disseminating  to 
the competent authorities, disclosures of information which concern potential money 
laundering  or  associated  predicate  offences,  potential  terrorist  financing  or  are 
required  by  national  legislation  or  regulation.  The  FIU  shall  be  provided  with 
adequate resources in order to fulfil its tasks. 

Member States shall ensure that the FIU has access, directly or indirectly, on a timely 
basis,  to  the  financial,  administrative  and  law  enforcement  information  that  it 
requires  to  properly  fulfil  its  tasks.  In  addition,  FIUs  shall  respond  to  requests  for 
information  by  law  enforcement  authorities  in  their  Member  State  unless  there  are 
factual  reasons  to  assume  that  the  provision  of  such  information  would  have  a 
negative 
in  exceptional 
impact  on  ongoing 
information  would  be  clearly 
circumstances,  where  divulgation  of 
disproportionate to the legitimate interests of a  natural  or  legal  person  or  irrelevant 
with regard to the purposes for which it has been requested. 

investigations  or  analyses,  or, 

the 

Member States shall ensure that the FIU is empowered to take urgent action, either 
directly or indirectly, when there is a suspicion that a transaction is related to money 
laundering  or  terrorist  financing,  to  suspend  or  withhold  consent  to  a  transaction 
going ahead in order to analyse the transaction and confirm the suspicion. 

The FIU’s analysis function shall consist of an operational analysis which focusses 
on  individual  cases  and  specific  targets  and  a  strategic  analysis  addressing  money 
laundering and terrorist financing trends and patterns. 

1. 

2. 

3. 

4. 

5. 

6. 

1. 

Member States shall require obliged entities, and where applicable their directors and 
employees, to cooperate fully: 

Article 32 

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(a)  by promptly informing the FIU, on their own initiative, where the institution or 
person covered by this Directive knows, suspects or has reasonable grounds to 
suspect that funds are the proceeds of criminal activity or are related to terrorist 
financing  and  by  promptly  responding  to  requests  by  the  FIU  for  additional 
information in such cases; 

(b)  by promptly furnishing the FIU, at its request, with all necessary information, 
in accordance with the procedures established by the applicable legislation. 

The information referred to in paragraph 1 of this Article shall be forwarded to the 
FIU of the Member State in whose territory the institution or person forwarding the 
information  is  situated.  The  person  or  persons  designated  in  accordance  with  the 
procedures provided for in Article 8(4) shall forward the information. 

Article 33 

By  way  of  derogation  from  Article  32(1),  Member  States  may,  in  the  case  of  the 
persons  referred  to  in  Article  2(1)(3)(a),  (b),  and  (d)  designate  an  appropriate  self-
regulatory  body  of  the  profession  concerned  as  the  authority  to  receive  the 
information referred to in Article 32(1).  

Without prejudice to paragraph 2, the designated self-regulatory body shall in cases 
referred to in the first subparagraph forward the information to the FIU promptly and 
unfiltered. 

Member States shall not apply the obligations laid down in Article 32(1) to notaries, 
other independent legal professionals, auditors, external accountants and tax advisors 
only to the strict extent that such exemption relates 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  in,  or 
concerning  judicial  proceedings,  including  advice  on  instituting  or  avoiding 
proceedings, whether such information is received or obtained before, during or after 
such proceedings. 

Article 34 

Member States shall require obliged entities to refrain from carrying out transactions 
which they know or suspect to be related to money laundering or terrorist financing 
until they have completed the necessary action in accordance with Article 32(1)(a).  

In conformity with the legislation of the Member States, instructions may be given 
not to carry out the transaction. 

Where such a transaction is suspected of giving rise to money laundering or terrorist 
financing and where to refrain in such manner is impossible or is likely to frustrate 
efforts  to  pursue  the  beneficiaries  of  a  suspected  money  laundering  or  terrorist 
financing operation, the obliged entities concerned shall inform the FIU immediately 
afterwards. 

2. 

1. 

2. 

1. 

2. 

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Article 35 

1. 

2. 

Member  States  shall  ensure  that  if,  in  the  course  of  inspections  carried  out  in  the 
obliged entities by the competent authorities referred to in Article 45, or in any other 
way,  those  authorities  discover  facts  that  could  be  related  to  money  laundering  or 
terrorist financing, they shall promptly inform the FIU. 

Member States shall ensure that supervisory bodies empowered by law or regulation 
to oversee the stock, foreign exchange and financial derivatives markets inform the 
FIU  if  they  discover  facts  that  could  be  related  to  money  laundering  or  terrorist 
financing. 

Article 36 

The disclosure in good faith as foreseen in Articles 32 (1) and 33 by an obliged entity or by an 
employee  or  director  of  such  an  obliged  entity  of  the  information  referred  to  in  Articles  32 
and 33 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 
obliged entity or its directors or employees in liability of any kind. 

Article 37 

Member  States  shall  take  all  appropriate  measures  in  order  to  protect  employees  of  the 
obliged  entity  who  report  suspicions  of  money  laundering  or  terrorist  financing  either 
internally or to the FIU from being exposed to threats or hostile action. 

SECTION 2 

PROHIBITION OF DISCLOSURE 

Article 38 

1. 

2. 

3. 

Obliged entities and their directors and employees shall not disclose to the customer 
concerned or to other third persons the fact that information has been transmitted in 
accordance with Articles 32 and 33 or that a money laundering or terrorist financing 
investigation is being or may be carried out. 

The  prohibition  laid  down  in  paragraph  1  shall  not  include  disclosure  to  the 
competent  authorities  of  Member  States,  including  the  self-regulatory  bodies,  or 
disclosure for law enforcement purposes. 

The  prohibition  laid  down  in  paragraph  1  shall  not  prevent  disclosure  between 
institutions from Member States, or from third countries which impose requirements 
equivalent to those laid down in this Directive provided that they belong to the same 
group.  

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4. 

5. 

6. 

The  prohibition  laid  down  in  paragraph  1  shall  not  prevent  disclosure  between 
persons referred to in Article 2(1)(3)(a) and (b) from Member States, or from third 
countries which impose requirements equivalent to those laid down in this Directive, 
who  perform  their  professional  activities,  whether  as  employees  or  not,  within  the 
same legal person or a network.  

For  the  purposes  of  the  first  subparagraph,  a  "network"  shall  mean  the  larger 
structure  to  which  the  person  belongs  and  which  shares  common  ownership, 
management or compliance control. 

For entities or persons referred to in Article 2(1)(1), (2) and (3)(a) and (b) in cases 
related  to  the  same  customer  and  the  same  transaction  involving  two  or  more 
institutions or persons, the prohibition laid down in paragraph 1 of this Article shall 
not prevent disclosure between the relevant institutions or persons provided that they 
are  situated  in  a  Member  State,  or  in  a  third  country  which  imposes  requirements 
equivalent  to  those  laid  down  in  this  Directive,  and  that  they  are  from  the  same 
professional  category  and  are  subject  to  obligations  as  regards  professional  secrecy 
and personal data protection.  

Where the persons referred to in Article 2(1)(3)(a) and (b) seek to dissuade a client 
from  engaging  in  illegal  activity,  this  shall  not  constitute  a  disclosure  within  the 
meaning of paragraph 1. 

CHAPTER V 

RECORD KEEPING AND STATISTICAL DATA  

Article 39 

Member States shall require obliged entities to store the following documents and information 
in accordance with national law for the purpose of the prevention, detection and investigation 
of  possible  money  laundering  or  terrorist  financing  by  the  FIU  or  by  other  competent 
authorities: 

(a) 

(b) 

in  the  case  of  the  customer  due  diligence,  a  copy  or  the  references  of  the  evidence 
required, for a period of five years after the business relationship with their customer 
has  ended.  Upon  expiration  of  this  period,  personal  data  shall  be  deleted  unless 
otherwise  provided  for  by  national  law,  which  shall  determine  under  which 
circumstances obliged entities may or shall further retain  data. Member States  may 
allow  or  require  further  retention  only  if  necessary  for  the  prevention,  detection  or 
investigation  of  money  laundering  and  terrorist  financing.  The  maximum  retention 
period after the business relationship has ended shall not exceed ten years; 

in  the  case  of  business  relationships  and  transactions,  the  supporting  evidence  and 
records,  consisting  of  the  original  documents  or  copies  admissible  in  court 
proceedings  under  the  applicable  national  legislation  for  a  period  of  five  years 
following  either  the  carrying-out  of  the  transactions  or  the  end  of  the  business 
relationship,  whichever  period  is  the  shortest.  Upon  expiration  of  this  period, 

EN 

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personal data shall be deleted, unless otherwise provided for by national law, which 
shall  determine  under  which  circumstances  obliged  entities  may  or  shall  further 
retain data. Member States may allow or require further retention only if necessary 
for  the  prevention,  detection  or  investigation  of  money  laundering  and  terrorist 
financing.  The  maximum  retention  period  following  either  the  carrying-out  of  the 
transactions or the end of the business relationship, whichever period ends first, shall 
not exceed ten years.  

Article 40 

Member States shall require that their obliged entities have systems in place that enable them 
to  respond  fully  and  rapidly  to  enquiries  from  the  FIU,  or  from  other  authorities,  in 
accordance with their national law, as to whether they maintain or have maintained during the 
previous five years a business relationship with specified natural or legal persons and on the 
nature of that relationship. 

Article 41 

1. 

Member States shall, for the purposes of the preparation of national risk assessments 
pursuant  to  Article  7,  ensure  that  they  are  able  to  review  the  effectiveness  of  their 
systems  to  combat  money  laundering  or  terrorist  financing  by  maintaining 
comprehensive statistics on matters relevant to the effectiveness of such systems. 

2. 

Statistics referred to in paragraph 1 shall include: 

(a)  data measuring the size and importance of the different sectors which fall under 
the  scope  of  this  Directive,  including  the  number  of  entities  and  persons  and 
the economic importance of each sector; 

(b)  data measuring the reporting, investigation and judicial phases of the national 
anti-money laundering and terrorist financing regime, including the number of 
suspicious  transaction  reports  made  to  the  FIU,  the  follow-up  given  to  these 
reports and, on an annual basis, the number of cases investigated, the number 
of persons prosecuted, the number of persons convicted for money laundering 
or terrorist financing offences and the value in euro of property that has been 
frozen, seized or confiscated. 

3. 

Member  States  shall  ensure  that  a  consolidated  review  of  their  statistical  reports  is 
published and shall transmit to the Commission the statistics referred to in paragraph 
2. 

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CHAPTER VI 

POLICIES, PROCEDURES AND SUPERVISION 

SECTION 1 

INTERNAL PROCEDURES, TRAINING AND FEEDBACK 

1. 

2. 

3. 

4. 

5. 

Article 42 

Member  States  shall  require  obliged  entities  that  are  part  of  a  group  to  implement 
group-wide  policies  and  procedures,  including  data  protection  policies  and  policies 
and procedures for  sharing  information within the group for anti-money  laundering 
and  combating  terrorist  financing  purposes.  Those  policies  and  procedures  shall  be 
implemented effectively at the level of branches and majority-owned subsidiaries in 
Member States and third countries. 

Member  States  shall  ensure  that  where  obliged  entities  have  branches  or  majority-
owned  subsidiaries  located  in  third  countries  where  the  minimum  anti-money 
laundering and combating terrorist financing requirements are less strict than those of 
the  Member  State,  their  branches  and  majority-owned  subsidiaries  located  in  the 
third  country  implement  the  requirements  of  the  Member  State,  including  data 
protection, to the extent that the third country's laws and regulations so allow. 

The Member States, EBA, EIOPA and ESMA shall inform each other of cases where 
the  legislation  of  the  third  country  does  not  permit  application  of  the  measures 
required  under  paragraph  1  and  coordinated  action  could  be  taken  to  pursue  a 
solution. 

Member States shall require that, where the legislation of the third country does not 
permit application of the measures required under the first subparagraph of paragraph 
1,  obliged  entities  take  additional  measures  to  effectively  handle  the  risk  of  money 
laundering or terrorist financing, and inform their home supervisors. If the additional 
measures are not sufficient, competent authorities in the home country shall consider 
additional  supervisory  actions,  including,  as  appropriate,  requesting  the  financial 
group to close down its operations in the host country. 

EBA,  EIOPA  and  ESMA  shall  develop  draft  regulatory  technical  standards 
specifying the type of additional measures referred to in paragraph 4 of this Article 
and  the  minimum  action  to  be  taken  by  obliged  entities  referred  to  Article  2(1)(1) 
and (2) where the legislation of the third country does not permit application of the 
measures required under paragraphs 1 and 2. EBA, EIOPA and ESMA shall submit 
those draft regulatory technical standards to the Commission within two years of the 
date of entry into force of this Directive. 

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6. 

7. 

8. 

9. 

Power  is  delegated  to  the  Commission  to  adopt  the  regulatory  technical  standards 
referred to in paragraph 5 in accordance with the procedure laid down in Articles 10 
to 14 of Regulation (EU) No 1093/2010, of Regulation (EU) No 1094/2010 and of 
Regulation (EU) No 1095/2010. 

Member States shall ensure that sharing of information within the group is allowed 
provided that it does not prejudice investigation into, or analysis of, possible money 
laundering  or  terrorist  financing  by  the  FIU  or  by  other  competent  authorities  in 
accordance with national law. 

Member  States  may  require  issuers  of  electronic  money  as  defined  by  Directive 
2009/110/EC  of  the  European  Parliament  and  of  the  Council23  and  payment 
providers as defined by Directive 2007/64/EC of the European Parliament and of the 
Council24 established on their territory, and whose head office is situated in another 
Member  State  or  outside  the  Union,  to  appoint  a  central  contact  point  in  their 
territory  to  oversee  the  compliance  with  anti-money  laundering  and  terrorist 
financing rules. 

EBA,  EIOPA  and  ESMA  shall  develop  draft  regulatory  technical  standards  on  the 
criteria for determining the circumstances when the appointment of a central contact 
point pursuant to paragraph 8 above is appropriate, and what the functions of central 
contact  points  should  be.  EBA,  ESMA  and  EIOPA  shall  submit  these  draft 
regulatory  technical  standards  to  the  Commission  within  two  years  of  the  date  of 
entry into force of this Directive. 

10. 

Power  is  delegated  to  the  Commission  to  adopt  the  regulatory  technical  standards 
referred to in paragraph 9 in accordance with the procedure laid down in Articles 10 
to 14 of Regulation (EU) No 1093/2010, of Regulation (EU) No 1094/2010 and of 
Regulation (EU) No 1095/2010. 

Article 43 

1. 

Member States shall require that obliged entities take measures proportionate to their 
risks,  nature  and  size  so  that  their  relevant  employees  are  aware  of  the  provisions 
adopted pursuant to this Directive, including relevant data protection requirements. 

These  measures  shall  include  participation  of  their  relevant  employees  in  special 
ongoing  training  programmes  to  help  them  recognise  operations  which  may  be 
related to money laundering or terrorist financing and to instruct them as to how to 
proceed in such cases. 

Where a natural person falling within any of the categories listed in Article 2(1)(3) 
performs his professional activities as an employee of a legal person, the obligations 
in this Section shall apply to that legal person rather than to the natural person. 

Member  States  shall  ensure  that  obliged  entities  have  access  to  up-to-date 
information  on  the  practices  of  money  launderers  and  terrorist  financers  and  on 
indications leading to the recognition of suspicious transactions. 

OJ L 267, 10.10.2009, p. 7. 
OJ L 319, 5.12.2007, p. 1. 

44 

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2. 

23 
24 

EN 

                                                 
3. 

Member  States  shall  ensure  that,  wherever  practicable,  timely  feedback  on  the 
effectiveness of and follow-up to reports of suspected money laundering or terrorist 
financing is provided. 

SECTION 2 

SUPERVISION 

Article 44 

1. 

2. 

3. 

1. 

2. 

3. 

4. 

Member  States  shall  provide  that  currency  exchange  offices  and  trust  or  company 
service providers shall be licensed or registered and providers of gambling services 
be authorised.  

In  respect  of  the  entities  referred  to  in  paragraph  1,  Member  States  shall  require 
competent authorities to ensure that the persons who effectively direct or will direct 
the  business  of  such  entities  or  the  beneficial  owners  of  such  entities  are  fit  and 
proper persons. 

In  respect  of  the  obliged  entities  referred  to  in  Article  2(1)(3)  (a),  (b),  (d)  and  (e), 
Member States shall ensure that competent authorities take the necessary measures to 
prevent criminals or their associates from holding or being the beneficial owner of a 
significant or controlling interest, or holding a management function in those obliged 
entities. 

Article 45 

Member States shall require the competent authorities to effectively monitor and to 
take the necessary measures with a view to ensure compliance with the requirements 
of this Directive.  

Member  States  shall  ensure  that  the  competent  authorities  have  adequate  powers, 
including the power to compel the production of any information that is relevant to 
monitoring compliance and perform checks, and have adequate financial, human and 
technical resources to perform their functions. Member States shall ensure that staff 
of  these  authorities  maintain  high  professional  standards,  including  standards  of 
confidentiality  and  data  protection,  they  shall  be  of  high  integrity  and  be 
appropriately skilled. 

In  the  case  of  credit  and  financial  institutions  and  providers  of  gambling  services, 
competent  authorities  shall  have  enhanced  supervisory  powers,  notably  the 
possibility to conduct on-site inspections. 

Member States shall ensure that obliged entities that operate branches or subsidiaries 
in  other  Member  States  respect  the  national  provisions  of  that  other  Member  State 
pertaining to this Directive.  

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45 

   EN 

5. 

6. 

7. 

8. 

9. 

10. 

Member  States  shall  ensure  that  the  competent  authorities  of  the  Member  State  in 
which  the  branch  or  subsidiary  is  established  shall  cooperate  with  the  competent 
authorities  of  the  Member  State  in  which  the  obliged  entity  has  its  head  office,  to 
ensure effective supervision of the requirements of this Directive.  

Member  States  shall  ensure  that  competent  authorities  that  apply  a  risk-sensitive 
approach to supervision:  

(a)  have  a  clear  understanding  of  the  money  laundering  and  terrorist  financing 

risks present in their country;  

(b)  have  on-site  and  off-site  access  to  all  relevant  information  on  the  specific 
domestic  and  international  risks  associated  with  customers,  products  and 
services of the obliged entities; and  

(c)  base the frequency and intensity of on-site and off-site supervision on the risk 
profile  of  the  obliged  entity,  and  on  the  money  laundering  and  terrorist 
financing risks present in the country. 

The  assessment  of  the  money  laundering  and  terrorist  financing  risk  profile  of 
obliged  entities,  including  the  risks  of  non-compliance,  shall  be  reviewed  both 
periodically  and  when  there  are  major  events  or  developments  in  the  management 
and operations of the obliged entity. 

Member States shall ensure that competent authorities take into account the degree of 
discretion  allowed  to  the  obliged  entity,  and  appropriately  review  the  risk 
assessments underlying this discretion, and the adequacy and implementation  of  its 
policies, internal controls and procedures. 

In  the  case  of  the  obliged  entities  referred  to  in  Article  2(1)(3)(a),  (b)  and  (d) 
Member States may allow the functions referred to in paragraph 1 to be performed 
by self-regulatory bodies, provided that they comply with paragraph 2 of this Article. 

EBA, EIOPA and ESMA shall issue guidelines addressed to competent authorities in 
accordance  with  Article  16  of  Regulation  (EU)  No  1093/2010,  of  Regulation  (EU) 
No  1094/2010  and  of  Regulation  (EU)  No  1095/2010  on  the  factors  to  be  applied 
when  conducting  supervision  on  a  risk-sensitive  basis.  Specific  account  should  be 
taken of the nature and size of the business, and where appropriate and proportionate, 
specific measures should be foreseen. These guidelines shall be issued within 2 years 
of the date of entry into force of this Directive. 

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SECTION 3 

CO-OPERATION 

SUBSECTION I 

NATIONAL CO-OPERATION 

Article 46 

Member  States  shall  ensure  that  policy  makers,  the  FIU,  law  enforcement  authorities, 
supervisors and other competent authorities involved in anti-money laundering and combating 
terrorist  financing  have  effective  mechanisms  to  enable  them  to  co-operate  and  co-ordinate 
domestically  concerning  the  development  and  implementation  of  policies  and  activities  to 
combat money laundering and terrorist financing. 

SUBSECTION II 

CO-OPERATION WITH EBA, EIOPA AND ESMA 

Article 47 

The  competent  authorities  shall  provide  EBA,  EIOPA  and  ESMA  with  all  the  information 
necessary to carry out their duties under this Directive. 

SUBSECTION III 

CO-OPERATION BETWEEN FIUS AND WITH THE EUROPEAN COMMISSION 

Article 48 

The  Commission  may  lend  such  assistance  as  may  be  needed  to  facilitate  coordination, 
including  the  exchange  of  information  between  FIUs  within  the  Union.  It  may  regularly 
convene  meetings  with  representatives  from  Member  States’  FIUs  to  facilitate  co-operation 
and to exchange views on co-operation related issues. 

Article 49 

Member States shall ensure that their FIUs co-operate with each other to the greatest extent 
possible irrespective of whether they are administrative, law enforcement or judicial or hybrid 
authorities. 

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47 

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Article 50 

1. 

2. 

3. 

Member States shall ensure that FIUs exchange, spontaneously or upon request, any 
information  that  may  be  relevant  for  the  processing  or  analysis  of  information  or 
investigation by the FIU regarding financial transactions related to money laundering 
or terrorist financing and the natural or legal person involved. A request shall contain 
the  relevant  facts,  background  information,  reasons  for  the  request  and  how  the 
information sought will be used. 

Member States shall ensure that the FIU to whom the request is made is required to 
use the whole range of its powers which it has domestically available for receiving 
and analysing information when it replies to a request for information referred to in 
paragraph 1 from another FIU based in the Union. The FIU to whom the request is 
made  shall  respond  in  a  timely  manner  and  both  the  requesting  and  requested  FIU 
shall use secure digital means to exchange information, wherever possible. 

An  FIU  may  refuse  to  divulge  information  which  could  lead  to  impairment  of  a 
criminal  investigation  being  conducted  in  the  requested  Member  State  or,  in 
exceptional  circumstances,  where  divulgation  of  the  information  would  be  clearly 
disproportionate to the legitimate interests of a natural or legal person or the Member 
State or irrelevant to the purposes for which it has been collected. Any such refusal 
shall be appropriately justified to the FIU requesting the information. 

Article 51 

Information  and  documents  received  pursuant  to  Articles  49  and  50  shall  be  used  for  the 
accomplishment  of  the  FIU’s  tasks  as  laid  down  in  this  Directive.  When  transmitting 
information and documents pursuant to Articles 49 and 50, the transmitting FIU may impose 
restrictions  and  conditions  for  the  use  of  that  information.  The  receiving  FIU  shall  comply 
with those restrictions and conditions. This does not affect the use for criminal investigations 
and prosecutions linked to the FIU’s tasks to prevent, detect and investigate money laundering 
and terrorist financing. 

Article 52 

Member  States  shall  ensure  that  FIUs  undertake  all  necessary  measures,  including  security 
measures,  to  ensure  that  information  submitted  pursuant  to  Articles  49  and  50  is  not 
accessible by any other authority, agency or department, unless prior approval is given by the 
FIU providing the information. 

Article 53 

1. 

2. 

Member  States  shall  encourage 
to  use  protected  channels  of 
their  FIUs 
communication  between  FIUs  and  to  use  the  decentralised  computer  network 
FIU.net. 

Member  States  shall  ensure  that,  in  order  to  fulfil  their  tasks  as  laid  down  in  this 
Directive,  their  FIUs  co-operate  to  apply  sophisticated  technologies.  These 
technologies shall allow FIUs to match their data with other FIUs in an anonymous 

EN 

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way by ensuring full protection of personal data with the aim to detect subjects of the 
FIU’s interests in other Member States and identify their proceeds and funds. 

Member States shall ensure that their FIUs cooperate with Europol regarding analyses carried 
out having a cross-border dimension concerning at least two Member States. 

Article 54 

SECTION 4 

SANCTIONS 

Article 55 

1. 

2. 

3. 

4. 

Member States shall ensure that obliged entities can be held liable for breaches of the 
national provisions adopted pursuant to this Directive.  

Without  prejudice  to  the  right  of  Member  States  to  impose  criminal  penalties, 
Member  States  shall  ensure  that  competent  authorities  may  take  appropriate 
administrative measures and impose administrative sanctions where obliged entities 
breach the national provisions, adopted in the implementation of this Directive, and 
shall ensure  that they are applied. Those measures and sanctions shall  be effective, 
proportionate and dissuasive. 

Member States shall ensure that where obligations apply to legal persons, sanctions 
can be applied to the members of the management body or to any other individuals 
who under national law are responsible for the breach. 

Member States shall ensure that the competent authorities have all the investigatory 
powers that are necessary for the exercise of their functions. In the exercise of their 
sanctioning  powers,  competent  authorities  shall  cooperate  closely  to  ensure  that 
administrative measures or sanctions produce the desired results and coordinate their 
action when dealing with cross border cases. 

1. 

This  Article  shall  at  least  apply  to  situations  where  obliged  entities  demonstrate 
systematic failings in relation to the requirements of the following Articles: 

Article 56 

(a)  9 to 23 (customer due diligence); 

(b)  32, 33 and 34 (suspicious transaction reporting); 

(c)  39 (record keeping); and 

(d)  42 and 43 (internal controls). 

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2. 

Member  States  shall  ensure  that  in  the  cases  referred  to  in  paragraph  1,  the 
administrative  measures  and  sanctions  that  can  be  applied  include  at  least  the 
following:  

(a) 

(b) 

(c) 

(d) 

(e) 

(f) 

a public statement which indicates the natural or legal person and the nature of 
the breach; 

an order requiring the natural or legal person to cease the conduct and to desist 
from a repetition of that conduct; 

in  case  of  an  obliged  entity  subject  to  an  authorisation,  withdrawal  of  the 
authorisation; 

a temporary ban against any member of the obliged entity's management body, 
who is held responsible, to exercise functions in institutions; 

in  case  of  a  legal  person,  administrative  pecuniary  sanctions  of  up  to  10%  of 
the total annual turnover of that legal person in the preceding business year; 

in case of a natural person, administrative pecuniary sanctions of up to EUR 5 
000 000, or in the Member States where the euro is not the official currency, 
the corresponding value in the national currency on the date of entry into force 
of this Directive; 

(g) 

administrative  pecuniary  sanctions  of  up  to  twice  the  amount  of  the  profits 
gained or losses avoided because of the breach where those can be determined. 

For the purpose of point (e), where the legal person is a subsidiary of a parent undertaking, the 
relevant  total  annual  turnover  shall  be  the  total  annual  turnover  resulting  from  the 
consolidated account of the ultimate parent undertaking in the preceding business year. 

Article 57 

1. 

2. 

Member  States  shall  ensure  that  competent  authorities  publish  any  sanction  or 
measure imposed for breach of the national provisions adopted in the implementation 
of this Directive without undue delay including information on the type and nature of 
the  breach  and  the  identity  of  persons  responsible  for  it,  unless  such  publication 
would  seriously  jeopardise  the  stability  of  financial  markets.  Where  publication 
would cause a disproportionate damage to the parties involved, competent authorities 
shall publish the sanctions on an anonymous basis. 

Member  States  shall  ensure  that  when  determining  the  type  of  administrative 
sanctions  or  measures  and  the  level  of  administrative  pecuniary  sanctions,  the 
competent authorities shall take into account all relevant circumstances, including: 

(a) 

the gravity and the duration of the breach; 

(b) 

the degree of responsibility of the responsible natural or legal person; 

(c) 

the financial strength of the responsible natural or legal person, as indicated by 
the total turnover of that person or the annual income of that person; 

EN 

50 

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(d) 

(e) 

(f) 

the importance of profits gained or losses avoided by the responsible natural or 
legal person, insofar as they can be determined; 

the  losses  for  third  parties  caused  by  the  breach,  insofar  as  they  can  be 
determined; 

the  level  of  cooperation  of  the  responsible  natural  or  legal  person  with  the 
competent authority; 

(g)  previous breaches by the responsible natural or legal person. 

EBA, EIOPA, and ESMA shall issue guidelines addressed  to competent authorities 
in accordance with Article 16 of Regulation (EU) No 1093/2010, of Regulation (EU) 
No  1094/2010  and  of  Regulation  (EU)  No  1095/2010  on  types  of  administrative 
measures and sanctions and level of administrative pecuniary sanctions applicable to 
obliged entities referred to in Article 2(1)(1) and (2). These guidelines shall be issued 
within 2 years of the date of entry into force of this Directive. 

In the case of legal persons, Member States shall ensure that they may be held liable 
for  infringements  referred  to  in  paragraph  1  of  Article  56  which  are  committed  for 
their  benefit  by  any  person,  acting  either  individually  or  as  part  of  an  organ  of  the 
legal person, who has a leading position within the legal person, based on any of the 
following: 

(a) 

a power of representation of the legal person; 

(b) 

an authority to take decisions on behalf of the legal person; or 

(c) 

an authority to exercise control within the legal person. 

In addition to the cases referred to in paragraph 4, Member States shall ensure that 
legal persons can be held liable where the lack of supervision or control by a person 
referred  to  in  paragraph  4  has  made  possible  the  commission  of  the  infringements 
referred to in paragraph 1 of Article 56 for the benefit of a legal person by a person 
under its authority. 

Article 58 

that  competent  authorities  establish  effective 
Member  States  shall  ensure 
mechanisms  to  encourage  reporting  of  breaches  of  the  national  provisions 
implementing this Directive to competent authorities. 

3. 

4. 

5. 

1. 

2. 

The mechanisms referred to in paragraph 1 shall include at least: 

(a) 

specific procedures for the receipt of reports on breaches and their follow-up;  

(b) 

appropriate  protection  for  employees  of  institutions  who  report  breaches 
committed within the institution; 

(c)  protection  of  personal  data  concerning  both  the  person  who  reports  the 
breaches  and  the  natural  person  who  is  allegedly  responsible  for  a  breach,  in 
compliance with the principles laid down in Directive 95/46/EC. 

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3. 

Member States shall require obliged entities to have in place appropriate procedures 
for their employees to report breaches internally through a specific, independent and 
anonymous channel. 

CHAPTER VII 

FINAL PROVISIONS 

Article 59 

Within  four  years  after  the  date  of  entry  into  force  of  this  Directive,  the  Commission  shall 
draw  up  a  report  on  the  implementation  of  this  Directive  and  submit  it  to  the  European 
Parliament and the Council. 

Article 60 

Directives 2005/60/EC and 2006/70/EC are repealed with effect from [insert date – day after 
the date set out in the first subparagraph of Article 61]. 

References to the repealed Directives shall be construed as being made to this Directive and 
should be read in accordance with the correlation table in Annex IV. 

Article 61 

1. 

Member  States  shall  bring  into  force  the  laws,  regulations  and  administrative 
provisions necessary to comply with this Directive by [two years after adoption] at 
the  latest.  They  shall  forthwith  communicate  to  the  Commission  the  text  of  those 
provisions.  

When  Member  States  adopt  those  provisions,  they  shall  contain  a  reference  to  this 
Directive  or  be  accompanied  by  such  a  reference  on  the  occasion  of  their  official 
publication. Member States shall determine how such reference is to be made. 

2. 

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

This Directive shall enter into force on the twentieth day following that of its publication in 
the Official Journal of the European Union. 

Article 62 

EN 

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   EN 

Article 63 

This Directive is addressed to the Member States. 

Done at Strasbourg, 

For the European Parliament 
The President 

For the Council 
The President 

EN 

53 

   EN 

ANNEX I 

The  following  is  a  non-exhaustive  list  of  risk  variables  that  obliged  entities  shall  consider 
when  determining  to  what  extent  to  apply  customer  due  diligence  measures  in  accordance 
with Article 11(3): 

(i) 

(ii) 

The purpose of an account or relationship; 

The  level  of  assets  to  be  deposited  by  a  customer  or  the  size  of  transactions 
undertaken; 

(iii) 

The regularity or duration of the business relationship. 

EN 

54 

   EN 

ANNEX II 

The  following  is  a  non-exhaustive  list  of  factors  and  types  of  evidence  of  potentially  lower 
risk referred to in Article 14: 

(1) 

Customer risk factors: 

(a)  public  companies  listed  on  a  stock  exchange  and  subject  to  disclosure 
requirements  (either  by  stock  exchange  rules  or  through  law  or  enforceable 
means),  which  impose  requirements  to  ensure  adequate  transparency  of 
beneficial ownership; 

(b)  public administrations or enterprises; 

(c) 

customers resident in lower risk geographical areas as set out in paragraph (3). 

(2) 

Product, service, transaction or delivery channel risk factors: 

(a) 

life insurance policies where the premium is low; 

(b) 

(c) 

(d) 

insurance policies for pension schemes if there is no early surrender option and 
the policy cannot be used as collateral; 

a pension,  superannuation  or similar scheme that provides retirement benefits 
to employees, where contributions are made by way of deduction from wages, 
and  the  scheme  rules  do  not  permit  the  assignment  of  a  member’s  interest 
under the scheme; 

financial  products  or  services  that  provide  appropriately  defined  and  limited 
services  to  certain  types  of  customers,  so  as  to  increase  access  for  financial 
inclusion purposes; 

(e)  products  where  the  risk  of  money  laundering/terrorist  financing  are  managed 
by other factors such as purse limits or transparency of ownership (e.g. certain 
types  of  electronic  money  as  defined  in  Directive  2009/110/EC  on  the  taking 
up,  pursuit  and  prudential  supervision  of  the  business  of  electronic  money 
institutions). 

(3) 

Geographical risk factors: 

(a)  other EU Member States; 

(b) 

(c) 

(d) 

third  countries  having  effective  anti-money  laundering/combating  terrorist 
financing systems; 

third  countries  identified  by  credible  sources  as  having  a  low  level  of 
corruption or other criminal activity; 

third countries which are subject to requirements to combat money laundering 
and  terrorist  financing  consistent  with  the  FATF  Recommendations,  have 
effectively implemented those requirements, and are effectively supervised or 

EN 

55 

   EN 

monitored in accordance with the Recommendations to ensure compliance with 
those requirements. 

EN 

56 

   EN 

ANNEX III 

The following is a non-exhaustive list of factors and types of evidence of potentially higher 
risk referred to in Article 16(3): 

(1) 

Customer risk factors: 

(a) 

the business relationship is conducted in unusual circumstances; 

(b) 

customers resident in countries set out in (3); 

(c) 

legal persons or arrangements that are personal asset-holding vehicles; 

(d) 

companies that have nominee shareholders or shares in bearer form; 

(e)  businesses that are cash-intensive; 

(f) 

the  ownership  structure  of  the  company  appears  unusual  or  excessively 
complex given the nature of the company’s business. 

(2) 

Product, service, transaction or delivery channel risk factors: 

(a)  private banking; 

(b)  products or transactions that might favour anonymity; 

(c)  non-face-to-face business relationships or transactions; 

(d)  payment received from unknown or un-associated third parties; 

(e)  new products and new business practices, including new delivery mechanism, 
and  the  use  of  new  or  developing  technologies  for  both  new  and  pre-existing 
products. 

(3) 

Geographical risk factors: 

(a) 

(b) 

(c) 

(d) 

countries identified by credible sources, such FATF public statements, mutual 
evaluation or detailed assessment reports or published follow-up reports, as not 
having effective anti-money laundering/combating terrorist financing systems; 

countries  identified  by  credible  sources  as  having  significant  levels  of 
corruption or other criminal activity; 

countries  subject  to  sanctions,  embargos  or  similar  measures  issued  by,  for 
example, the United Nations; 

countries  providing  funding  or  support  for  terrorist  activities,  or  that  have 
designated terrorist organisations operating within their country. 

EN 

57 

   EN 

Correlation table referred to in Article 60. 

ANNEX IV 

Directive 2005/60/EC 

This Directive  

Article 1 

Article 2 

Article 3 

Article 4 

Article 5 

Article 6 

Article 7 

Article 8 

Article 9  

Article 10(1) 

Article 10(2) 

Article 11  

Article 12  

Article 13 

Article 14 

Article 15 

Article 16 

Article 17  

Article 18 

Article 19 

Article 1 

Article 2 

Article 3 

Article 4 

Article 5 

Articles 6 to 8 

Article 9 

Article 10 

Article 11 

Article 12 

Article 10(d) 

- 

Articles 13, 14 and 15 

- 

Articles 16 to 23 

Article 24 

- 

Article 25 

- 

Article 26 

Article 27 

Article 28 

Article 29 

Article 30 

EN 

58 

   EN 

 
 
 
 
Article 20  

Article 21 

Article 22 

Article 23 

Article 24 

Article 25 

Article 26 

Article 27 

Article 28 

Article 29 

Article 30 

Article 31 

Article 32 

Article 33 

Article 34 

Article 35 

Article 36  

Article 37 

Article 37a 

Article 38 

Article 39 

Article 40 

Article 41 

Article 41a 

Article 41b 

EN 

- 

Article 31 

Article 32 

Article 33 

Article 34 

Article 35 

Article 36 

Article 37 

Article 38 

- 

Article 39 

Article 42 

Article 40 

Article 41 

Article 42 

Article 43 

Article 44 

Article 45 

Article 46 

Article 47 

Article 48 

Articles 49 to 54 

Articles 55 to 58 

- 

- 

- 

- 

59 

   EN 

 
 
Article 42 

Article 43 

Article 44 

Article 45 

Article 46 

Article 47 

Article 59 

- 

Article 60 

Article 61 

Article 62 

Article 63 

Directive 2006/70/EC 

This Directive  

Article 1 

- 

Article 2(1), (2) and (3) 

Article 3(7)(d), (e) and (f) 

Article 2(4)  

Article 3  

Article 4 

Article 5  

Article 6  

Article 7  

- 

- 

Article 2(2) to (8) 

- 

- 

- 

EN 

60 

   EN