Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing and amending Directive 2009/101/EC
Date: 2016-07-05
Institutions: Directorate-General for Justice and Consumers, European Commission
Subjects: banking supervision, company law, disclosure of information, economic offence, electronic banking, electronic money, fight against crime, financial transaction, money laundering, terrorism

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   EUROPEAN COMMISSION  Strasbourg, 5.7.2016  COM(2016) 450 final 2016/0208 (COD)   Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing and amending Directive 2009/101/EC (Text with EEA relevance) {SWD(2016) 223 final} {SWD(2016) 224 final}  
 
EXPLANATORY MEMORANDUM 

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CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

This proposal sets out a series of measures to better counter the financing of terrorism and to 
ensure  increased  transparency  of  financial  transactions  and  of  corporate  entities  under  the 
preventive  legal  framework  in  place  in  the  Union,  namely  Directive  (EU)  2015/849  (the 
"4AMLD")1.  It also sets out certain consequential changes to the relevant company law rules 
under Directive 2009/101/EC2. 

The  adoption  of  the  updated  Anti-Money  Laundering  rules  in  May  2015  represented  a 
significant step in improving the effectiveness of the EU's efforts to combat the laundering of 
money from criminal activities and to counter the financing of terrorist activities. 

But the terrorist threat has grown and evolved recently. At the same time, fuelled by advances 
in  technology  and  communications,  the  globally  interconnected  financial  system  makes  it 
simple to hide and move funds around the world, by quickly and easily setting up layer upon 
layer  of  paper  companies,  crossing  borders  and  jurisdictions  and  making  it  increasingly 
difficult  to  track  down  the  money.  Money  launderers,  tax  evaders,  terrorists,  fraudsters  and 
other criminals are all able to cover their tracks in this way. 

A sound financial system, with proper scrutiny and analytical tools in place, may, by helping 
to uncover anomalous transaction patterns, contribute to a better understanding of terrorist and 
criminal  connections,  networks  and  threats,  and  lead  to  relevant  preventive  actions  by  all 
competent  authorities  involved.  However,  gaps  still  exist  in  the  oversight  of  the  many 
financial  means  used  by  terrorists,  from  cash  and  trade  in  cultural  artefacts  to  virtual 
currencies  and  anonymous  pre-paid  cards.  This  proposal  seeks  to  address  those  gaps  while 
avoiding  unnecessary  obstacles  to  the  functioning  of  payments  and  financial  markets  for 
ordinary, law-abiding citizens and businesses, so balancing the need to increase security with 
the need to protect fundamental rights, including data protection, and economic freedoms. 

At  the  same  time  and  in  addition  to  terrorist  financing  issues,  significant  gaps  in  the 
transparency  of  financial  transactions  around  the  world  have  been  revealed  which  indicate 
that offshore jurisdictions are often used as locations of intermediary entities that distance the 
real owner from the assets owned, often to avoid or evade tax. This proposal seeks to prevent 
the  large-scale  concealment  of  funds  which  can  hinder  the  effective  fight  against  financial 
crime,  and  to  ensure  enhanced  corporate  transparency  so  that  true  beneficial  owners  of 
companies or other legal arrangements cannot hide behind undisclosed identities.  

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Directive  (EU)  2015/849  of  the  European  Parliament  and  of  the  Council  of  20  May  2015  on  the 
prevention  of  the  use  of  the  financial  system  for  the  purposes  of  money  laundering  or  terrorist 
financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and 
repealing  Directive  2005/60/EC  of  the  European  Parliament  and  of  the  Council  and  Commission 
Directive 2006/70/EC (OJ L 141, 5.6.2015, p. 73). 
Directive  2009/101/EC  of  the  European  Parliament  and  of  the  Council  of  16  September  2009  on 
coordination of safeguards which, for the protection of the interests of members and third parties, are 
required by Member States of companies within the meaning of the second paragraph of Article 48 of 
the Treaty, with a view to making such safeguards equivalent (OJ  L 258, 1.10.2009, p. 11) 

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In the European Agenda on Security3 the Commission identified as a priority the upgrading of 
the  EU  legal  framework  to  address  terrorism.  The  conclusions  of  the  Justice  and  Home 
Affairs  Council  on  20  November  20154,  the  Economic  and  Financial  Affairs  Council  of  8 
December 20155, as well as of the European Council of 18 December 20156 all stressed the 
need  to  further  intensify  the  work  in  this  field,  building  on  the  improvements  made  in  the 
4AMLD.  

On  2  February  2016,  the  Commission  presented  an  Action  Plan  for  strengthening  the  fight 
against  terrorist  financing7  that  focuses  on  two  main  strands  of  action:    tracing  terrorists 
through  financial  movements  and  preventing  them  from  moving  funds  or  other  assets;  and 
disrupting the sources of revenue used by terrorist organisations, by targeting their capacity to 
raise  funds.  The  Action  Plan  announced  a  number  of  targeted  operational  and  legislative 
measures, including the present proposal, to be put in place rapidly.  

On  12  February  2016,  the  Economic  and  Financial  Affairs  Ministers  Council  called  on  the 
Commission  to  submit  its  proposal  to  amend  the  4AMLD  as  soon  as  possible  and  no  later 
than the second quarter of 2016. On 22 April 2016 the informal ECOFIN Council also called 
for action in particular to enhance the accessibility of beneficial ownership registers, to clarify 
the registration requirements for trusts, to speed up the interconnection of national beneficial 
ownership registers, promote automatic exchange of information on beneficial ownership, and 
strengthen  customer  due  diligence  rules8.  In  its  Resolution  of  16  December  20159,  the 
European  Parliament  had  already  stressed  that  improved  transparency,  coordination  and 
convergence in relation to corporate tax policies provides an effective framework to guarantee 
fair competition between firms in the Union and protect state budgets from adverse outcomes. 

The  proposed  revision  of  the  4AMLD  is  also  consistent  with  global  developments.  At 
international level, the UN Security Council Resolutions  2199(2015) and 2253(2015) called 
for  measures  to  prevent  terrorist  groups  from  gaining  access  to  international  financial 
institutions.  In  addition,  the  G20  statement  of  18  April  2016  calls  on  the  Financial  Action 
Task Force ('FATF') and the Global Forum on Transparency and Exchange of Information for 
Tax  Purposes  to  make  initial  proposals  to  improve  the  implementation  of  the  international 
standards on transparency, including on the availability of beneficial ownership information, 
and its international exchange.  

Effective supervision and enforcement are crucial to prevent money laundering, the financing 
of  terrorism  and  crime  in  general.  The  Commission  will  be  monitoring  the  correct 
transposition  of  the  Union  requirements  in  national  law,  as  well  as  their  effective 
implementation by Member States in practice. 

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Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic  and  Social  Committee  and  the  Committee  of  the  Regions  "The  European  Agenda  on 
Security", COM(2015) 185 final. 
http://www.consilium.europa.eu/en/press/press-releases/2015/11/20-jha-conclusions-counter-terrorism/ 
http://www.consilium.europa.eu/en/press/press-releases/2015/12/08-ecofin-conclusions-corporate-
taxation/ 
http://www.consilium.europa.eu/en/press/press-releases/2015/12/18-euco-conclusions/ 
Communication from the Commission to the European Parliament and the Council on an Action Plan 
for strengthening the fight against terrorist financing, COM(2016) 50 final. 
http://english.eu2016.nl/documents/publications/2016/04/22/informal-ecofin---line-to-take-nl-
presidency. 
http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-%2f%2fEP%2f%2fTEXT%2bTA%2bP8-TA-
2015-0457%2b0%2bDOC%2bXML%2bV0%2f%2fEN&language=EN 

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Consistency with existing policy provisions in the policy area 

On  20  May  2015,  a  revised  anti-money  laundering  and  counter-terrorism  financing 
(AML/CFT)  framework  was  adopted.  The  revised  rules  consist  of  the  4AMLD  and 
Regulation (EU) 2015/847 on information accompanying transfers of funds.  

The transposition date for the 4AMLD and the entry into force of Regulation (EU) 2015/847 
is 26 June 2017. However, the Commission has encouraged Member States to anticipate the 
transposition date of the 4AMLD, and this proposal amends that date to 1 January 2017. The 
proposed amendments concern selected issues that Member States can already be called upon 
to address, within the ongoing process of transposition of the provisions of the 4AMLD. All 
measures  aim  to  enhance  the  efficiency  of  the  current  AML/CFT  system  and  have  been 
drafted  to  coherently  supplement  it.  Thus,  this  proposal  lays  down  rules  that  build  on  the 
experience of Member States in transposing and implementing the 4AMLD (setting up central 
registers),  answer  the  requests  of  those  that  effectively  apply  the  rules  (designation  of  new 
obliged entities, empower the national Financial Intelligence Units (FIUs), harmonisation of 
the approach towards high-risk third countries) and reflect the newest trends observed in the 
fight  against  money  laundering  and  terrorism  financing  (improve  access  to  beneficial 
ownership  information).  As  such,  this  proposal  provides  a  framework  that  should  allow  the 
national  legal  order  of  Member  States  to  be  up  to  date  and  better  equipped  to  face  current 
challenges.  Member  States,  in  light  of  commitments  already  undertaken,  should  be  in  a 
position to speed up the pace of transposition of these provisions.  

This  proposal  takes  stock  of  the  findings  and  assessment  by  the  Commission  through  its 
existing  mechanisms  of  evaluating  Member  States'  legal  and  institutional  frameworks  and 
practice in the field of preventing money laundering and the financing of terrorism. It is based 
on  data  shared  with  the  Commission  in  the  context  of  transposing  the  4AMLD.  Also,  the 
proposed  amendments  take  into  account  relevant  existing  studies  and  reports  (in  particular 
those  conducted  in  2009  and  2012)  on  the  application  rules  in  place  in  Member  States,  all 
newly 
revised  FATF 
Recommendations)  and  all  information so far gathered through the opening of infringement 
procedures  under  Article  258  of  the  Treaty  on  the  Functioning  of  the  European  Union. 
Moreover, in order to obtain a comprehensive and accurate view, the Commission has taken 
into account data made available through international cooperation in financial supervision. 

(in  particular 

requirements 

international 

established 

the 

Regarding enforcement, this proposal builds on lessons learnt with the implementation of the 
existing anti-money laundering rules and puts a stronger focus on the implementation of the 
current  rules.  This  proposal  reflects  the  Commission's  commitment  to  closely  monitor  the 
correct  transposition  of  the  directive  and  the  effectiveness  of  Member  States'  national 
regimes. In this respect, the Commission will build on work already undertaken by the FATF 
(peer review process) or use the national risk assessments conducted by Member States as a 
basis for the effectiveness assessment.   

Finally, as regards company law and Directive 2009/101/EC, this Directive has already been 
transposed in the Member States. The proposed amendments to Directive 2009/101/EC create 
a new set of rules applicable to a clearly defined category of companies and trusts that reflect 
and  complement  the  rules  in  the  revised  4AMLD,  aiming  to  ensure  enhanced  corporate 
transparency. Therefore, as they have a distinct scope of application, these new rules must be 
included in Directive 2009/101/EC, ensuring the necessary cross-references to the 4AMLD. 

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Consistency with other Union policies 

The  proposed  amendments  to  the  4AMLD  (and  Directive  2009/101/EC)  are  in  line  with 
policy aims pursued by the Union, and in particular:  

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the criminal law framework with regard to offences relating to terrorist groups,  and 
especially the incrimination of terrorism financing as included in the proposal for a 
Directive  on  combating  terrorism10,  as  well  as  the  commitments  undertaken  by  the 
Union when signing the Additional Protocol to the Council of Europe Convention on 
the Prevention of Terrorism; 

the  single  market  for  payments  establishing  a  safer  and  more  innovative  payment 
services  across  the  EU,  namely  rules  laid  down  in  Directive  (EU)  2015/236611  and 
Regulation 2015/75112; 

the legal framework setting up customer due diligence on financial accounts enabling 
the  automatic  exchange  of  financial  account  information  in  tax  matters  (by 
implementing  the  Global  Standard)  as  foreseen  by  Directive  2011/16/EU,  as 
amended by Directive 2014/107/EU13; 

the  framework  for  effective  public  and  private  online  services,  electronic  business 
and electronic commerce in the Union, as set up by Regulation (EU) No 910/201414; 
the  reformed  data  protection  regime,  stemming  from  Regulation  (EU)  2016/67915 
and Directive (EU) 2016/68016, and in line with the relevant case law of the Court of 
Justice of the European Union; 

the digital single market, as set out in the Commission's Communication "A digital 
single  market  strategy  for  Europe"17  and  the  specific  provisions  on  electronic 
identification  and  trust  services  for  electronic  transactions  laid  down  in  Regulation 
(EU) No 910/2014 (the "eIDAS Regulation")18; 

consumer protection and financial inclusion; 

COM(2015) 625 final. 
Directive  (EU)  2015/2366  of  the  European  Parliament  and  of  the  Council  of  25  November  2015  on 
payment  services  in  the  internal  market,  amending  Directives  2002/65/EC,  2009/110/EC  and 
2013/36/EU and Regulation (EU) No 1093/2010. 
Regulation 2015/751 of the European Parliament and of the Council of 29 April 2015 on interchange 
fees for card-based payment transactions. 
Council  Directive  2014/107/EU  of  9  December  2014  amending  Directive  2011/16/EU  as  regards 
mandatory automatic exchange of information in the field of taxation, OJ L 359, 16.12.2014, p. 1. 
Regulation  (EU)  No  910/2014  of  the  European  Parliament  and  of  the  Council  of  23  July  2014  on 
electronic  identification  and  trust  services  for  electronic  transactions  in  the  internal  market  and 
repealing Directive 1999/93/EC. 
Regulation  (EU)  2016/679  of  the  European  Parliament  and  of  the  Council  of  27  April  2016  on  the 
protection of natural persons with regard to the processing of personal data and on the free movement of 
such data, and repealing Directive 95/46/EC (General Data Protection Regulation) (OJ L 119, 4.5.2016, 
p. 1). 
Directive  (EU)  2016/680  of  the  European  Parliament  and  of  the  Council  of  27  April  2016  on  the 
protection of natural persons with regard to the processing of personal data by competent authorities for 
the  purposes  of  the  prevention,  investigation,  detection  or  prosecution  of  criminal  offences  or  the 
execution  of  criminal  penalties,  and  on  the  free  movement  of  such  data,  and  repealing  Council 
Framework Decision 2008/977/JHA (OJ L 119, 4.5.2016, p. 89). 
COM(2015) 192 final. 
Regulation  (EU)  No  910/2014  of  the  European  Parliament  and  of  the  Council  of  23  July  2014  on 
electronic  identification  and  trust  services  for  electronic  transactions  in  the  internal  market  and 
repealing Directive 1999/93/EC (OJ L 257, 28.8.2014, p. 73). 

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the  objectives  pursued  by  the  Commission  as  indicated  in  its  Communication  on 
further  measures  to  enhance  transparency  and  the  fight  against  tax  evasion  and 
avoidance19. 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

This proposal amends the 4AMLD, as well as Directive 2009/101/EC. It is therefore based on 
Articles 114 and 50 TFEU, which are the legal bases of the amended acts. 

• 

Subsidiarity  

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. In line with existing rules in both 
the 4AMLD and Directive 2009/101/EC, under this proposal Member States have the right to 
adopt or retain measures that are more stringent than those set out in Union law.

The  existing  legal  framework  enabling  the  financial  system  to  prevent  the  financing  of 
terrorism  was  set  up  at  Union  level.  Improving  the  existing  legal  framework  cannot  be 
achieved  by  Member  States  acting  autonomously.  A  thorough  check  of  subsidiarity  was 
performed  in  the  context  of  adopting  the  4AMLD.  As  organised  criminal  and  terrorism 
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. Given the cross-border nature of the terrorist threats, the 
scope of the proposed rules needs to be sufficiently aligned, coherent and consistent at Union 
level to be truly effective.  

In addition, lack of an effective AML/CFT framework in one Member State may be exploited 
by  criminals  and  has  consequences  in  another  Member  State.  Therefore,  it  is  important  to 
have a harmonised framework at Union level, as massive flows of "illicit" money and terrorist 
financing can damage the stability and reputation of the financial sector.. 

Clearly  drafted  rules  requiring  enhanced  transparency  for  a  broad  range  of  economic 
operators,  including  undertakings  and  business-type  trusts,  address  more  than  theoretical 
disparities in the functioning of the internal market. The risk of an impaired functioning of the 
internal  market  is  a  concrete  one:  all  Member  States  are  directly  impacted  by  increasing 
efforts  on  unprecedented  scale  by  criminals  and  their  associates  to  disguise  the  origin  of 
criminal proceeds or to channel lawful or illicit money for terrorist purposes. 

• 

Proportionality 

The  proposed  amendments  are  limited  to  what  is  necessary  to  achieve  the  objectives  of 
tackling terrorist financing and increasing corporate transparency, and build on rules already 
in force, in line with the principle of proportionality.  

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COM(2016) 451 

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A detailed description of alternative measures that could be envisaged to attain the objectives 
of this proposal is given in the accompanying Impact Assessment.  

With special regard to the timely identification of holders of bank and payment accounts by 
FIUs, the most proportionate of several options has been retained: Member States remain free 
to  set  up  either  a  central  banking  registry,  or  a  retrieval  system,  whichever  means  best  fits 
their  own  existing  framework.  Likewise,  concerning  the  enhanced  customer  due  diligence 
measures  obliged  entities  have  to  apply  in  respect  of  high-risk  third  countries,  of  all  valid 
options, the one that ensures a harmonised approach at Union level while fully implementing 
international commitments undertaken is considered the most proportionate. 

In  respect  of  designing  providers  of  exchange  services  between  virtual  currencies  and  fiat 
currencies as obliged entities, the proposed amendments respect the proportionality principle. 
In  order  to  allow  competent  authorities  to  monitor  suspicious  transactions  with  virtual 
currencies,  while  preserving  the  innovative  advances  offered  by  such  currencies,  it  is 
appropriate to define as obliged entities under the 4AMLD all gatekeepers that control access 
to  virtual  currencies,  in  particular  exchange  platforms  and  wallet  providers.  The  proposed 
measure takes into account, on the one hand, the fragmentation of financial information, and, 
on  the  other,  the  lack  of  direct,  swift  access  to  this  information  by  FIU's  and  AML/CFT 
competent authorities. Furthermore, information  that will be available must be accurate (i.e. 
the information should be precise enough in order to avoid targeting the wrong person) and 
limited  to  what  is  necessary  (proportionality)  to  enable  FIUs  and  AML/CFT  competent 
authorities  to  match  all  the  bank  and  payment  accounts  with  their  corresponding 
accountholders, proxy holders, and beneficial owners. 

In  respect  of  prepaid  instruments,  acknowledging  that  they  present  a  clear  social  interest  as 
they are used in certain Member States to pay social benefits, the principle of proportionality 
dictates  that  due  account  be  taken  of  the  needs  of  financially  vulnerable  persons.  Thus,  the 
measures  proposed  seek  to  promote  financial  inclusion,  and  such  prepaid  cards  will  still  be 
able  to  function  as  a  de  facto  substitute  for  a  bank  account.  In  addition,  given  that  it  is 
necessary to balance the legitimate request for anonymity of payments by individuals with the 
requirements of effectively monitoring suspicious transactions, and given latest market trends 
and figures that indicate the average amounts of non-suspicious transactions with anonymous 
prepaid instruments, it is appropriate and proportionate to reduce the thresholds set out in the 
4AMLD for transactions for which customer due diligence is not performed 

Proportionality  has  also been  ensured  in  respect of  transparency regimes  for information  on 
the beneficial owner of legal entities (companies, trusts, similar legal arrangements). Thus, a 
comprehensive  analysis  of  legitimate  requests  by  activists  and  NGOs,  the  need  to  ensure 
enhanced transparency of business relationships, legal standards in the field and particularly 
all rules regarding protection of privacy and personal data dictate that there should be a clear 
distinction made between categories of legal entities engaged in the management of trusts as a 
business, with a view to gain profit, and other categories. It is legitimate and proportionate to 
grant  public  access  to  a  limited  set  of  information  on  the  beneficial  owners  of  the  first 
category of legal entities, while, in respect of the second category, such beneficial ownership 
information  should  only  be  made  known  to  persons  and  organisations  demonstrating  a 
legitimate interest. 

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Choice of the instrument 

The  current  proposal  is  an  amendment  of  the  4AMLD  and  Directive  2009/101/EC  and, 
therefore, it is a directive.  

No alternative means – legislative or operational – can be used to attain the objectives of this 
proposal,  which  is  to  improve  the  existing  framework  that  enables  the  financial  system  to 
prevent  the  financing  of  terrorism  and  ensure  Union-wide  harmonised  rules  on  corporate 
transparency. 

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RESULTS  OF  STAKEHOLDER  CONSULTATIONS  AND 
ASSESSMENTS 

IMPACT 

Stakeholder consultations 

The  Commission  has  aimed  to  ensure  a  wide  participation  of  stakeholders  throughout  the 
policy  cycle  of  this  initiative,  through  a  series  of  targeted  consultations  (bilateral  contacts, 
meetings with stakeholders and experts, written consultations).  

As concerns terrorist financing, consultations were held with: 

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Member States and representatives of their public authorities; 

representatives of the European Parliament; 

representatives  of  the  payment  services  sector  (card  schemes,  issuers  of  prepaid 
cards, a representative association); 

relevant  virtual  currencies  market  players:  exchange  platforms,  wallet  providers,  a 
representative group of virtual currency stakeholders; 

stakeholders belonging to the banking and financial sector; 

Financial Intelligence Units (EU FIU Platform); 

Europol; 

consumer organisations; 

the European Data Protection Supervisor. 

In  order  to  collect  data,  the  Commission  has  sent  a  number  of  questionnaires/surveys.  In 
December  2015,  Member  States  (FIUs  and  public  authorities)  were  asked  to  explore  the 
agreed  problem  areas  relating  to  terrorism  financing,  to  seek  policy  views  and  data.  All 
Member  States  replied  by  22  January  2016.  The  questionnaire  covered:    how  national 
authorities  collect  data  to  detect  and  assess  suspected  terrorist  activities  and  how  this 
information  is  used;  a  mapping  of  the  existence  of  centralised  national  bank  and  payment 
accounts registers, or other similar mechanisms, such as central data retrieval systems, and to 
what extent this information can be used by national authorities to detect terrorist financing; 
examining  the  market  structure  and  any  regulatory  responses  at  national  level  for  prepaid 
instruments and virtual currencies, and the extent to which these instruments have been used 
in  terrorist  financing;  tackling  financial  flows  coming  from  high-risk  third  countries  via 
enhanced due diligence measures/countermeasures. 

With  respect  to  amendments  proposed  in  order  to  enhance  transparency  of  financial 
transactions  and  of  corporate  entities,  the  proposed  amendments  have  been  drafted  in  line 
with  the  views  expressed  by  Member  States  in  the  informal  ECOFIN  Council  of  22  April 
2016,  while  at  the  same  time  answering  the  requests  formulated  by  representatives  of  the 

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Member  States'  competent  authorities  during  transposition  seminars  for  the  Directive 
2014/107/EU on administrative cooperation. 

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Impact Assessment 

The  Impact  Assessment  draws  on  relevant  reports  issued  by  Union  and  international 
organisations  such  as  the  European  Banking  Authority  (EBA),  the  European  Central  Bank 
(ECB), Europol, the Bank for International Settlements (BIS), and the FATF. It also draws on 
data made available to the public by international media. 

It addresses the following issues: 

(1) 

(2) 

(3) 

(4) 

(5) 

Suspicious  transactions  involving  high  risk-third  countries  are  not  efficiently 
monitored due to unclear and uncoordinated customer due diligence requirements; 

Suspicious  transactions  made  through  virtual  currencies  are  not  sufficiently 
monitored  by the authorities, which are unable to link the transactions to identified 
persons; 

Current  measures  to  mitigate  money  laundering  and  terrorist  financing  risks 
associated with anonymous prepaid instruments are not sufficient; 

FIUs have limitations in ensuring timely access to – and exchange of – information 
held by obliged entities; 

FIUs lack access, or have delayed access, to information on the identity of holders of 
bank and payment accounts. 

Non-legislative  options  to  address  the  issues  identified  have  been  evaluated.  The 
Commission  could  (i)  formulate  'best  practices'  to  overcome  the  practical  obstacles 
identified  in  a  mapping  exercise,  which  is  currently  being  conducted  within  the  FIU 
platform; (ii) formulate recommendations to Member States (on a 'comply or explain' basis) 
in  order  to  mitigate  money  laundering  and  terrorist  financing  risks  identified  during  the 
suprantional  risk  assessment  that  is  currently  being  conducted;  and  (iii)  deepen  its 
engagement  within  international  fora  dealing  with  counter-terrorist  financing  in  order  to 
strengthen cooperation and exchange of information in this strategic field. 

The need to formulate specific regulatory provisions was retained as essential and the most 
appropriate option. 

In  respect  of  improving  the  effectiveness  of  EU  policy  for  high-risk  third  countries,  three 
regulatory  options  were  examined.  The  option  retained  is  to  modify  the  4AMLD  by 
providing a prescriptive list of enhanced customer due diligence measures to be applied by 
obliged entities, combined with an illustrative list of countermeasures that could be applied 
when dealing with high-risk third countries designated by the Commission. 

With  regard  to  improving  the  detection  of  suspicious  virtual  currency  transactions,  six 
regulatory options were examined. The option retained consists of a combination of means, 
namely (i) bringing virtual currency exchange platforms and (ii) custodial wallet providers 
under  the  scope  of  the  Directive,  while  (iii)  allowing  more  time  to  consider  options  as 
regards  a system of voluntary self-identification of virtual currency users. 

Insofar as reducing the misuse of anonymous prepaid is concerned, five regulatory options 
were examined. Here, the option retained consists of a combination of means, namely (i) the 
suppression of anonymity for the online use of reloadable and non-reloadable prepaid cards, 
and (ii) the reduction of the existing € 250 threshold for anonymous prepaid cards to € 150 
when used face-to-face.  

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In order to improve FIU access to – and exchange of – information held by obliged entities, 
two  regulatory  options  were  examined.  The  option  retained  is  to  further  clarify  the  legal 
obligations  on  FIUs  by  aligning  the  text  of  the  4AMLD  with  the  latest  international 
standards on the powers that FIUs should have when requesting additional information from 
obliged entities. 

To  provide  FIUs  (and  potentially  other  competent  authorities  active  in  the  anti-money 
laundering/counter-terrorist  financing  field)  with  an  efficient  mechanism  to  ensure  timely 
access  to  information  on  the  identity  of  holders  of  bank  and  payment  accounts,  three 
regulatory  options  were  examined.  The  option  retained  is  to  put  in  place  an  automated 
central  mechanism  –  such  as  a  central  registry  or  an  electronic  data  retrieval  system  –  at 
Member  State  level,  allowing  for  the  swift  identification  of  account  holders.  This 
mechanism  would  be  directly  accessible  to  national  FIUs  and  potentially  other  competent 
authorities active in the field of anti-money laundering or counter-terrorist financing. 

A  second  part  of  the  Impact  Assessment  was  specifically  drafted  to  deal  with  issues 
concerning  lack  of  transparency  and  measures  to  remedy  access  to  beneficial  ownership 
information. 

A first issue addressed is the non-systematic monitoring of the existing beneficial owners of 
existing  customers  like  trusts,  other  legal  arrangements  and  legal  entities  such  as 
foundations.  This  allows  circumvention  of  existing  EU  transparency  standards  found  in 
Directive  2011/16/EU  on  Administrative  Cooperation  and  an  opportunity  to  hide  illicit 
money, and requires new rules to be laid down at Union level. 

A  second  issue  assessed  is  the  publicity  and  transparency  of  the  beneficial  ownership 
registers  for  legal  entities.  The  4AMLD  already  establishes  obligations  in  respect  of  the 
identification of the beneficial owners of legal entities and legal arrangements, the storing of 
that information and differentiated levels of access to it. With a view to better record such 
information and enhance access to it, the Impact Assessment analysed options ranging from 
(i)  keeping  the  current  system  in  place  to  (ii)  making  the  optional  system  in  the  4AMLD 
mandatory  and  (iii)  establishing  public  access  to  information.  The  option  retained  as  the 
most  appropriate  from  a  costs,  impacts  and  legitimacy  perspective  was  that  of  requiring 
Member States to disclose via a register beneficial information for companies and business-
type trusts and other similar legal arrangements, while retaining the necessity to demonstrate 
a  legitimate  interest  for  access  to  that  information  in  respect  of  trusts  and  other  legal 
arrangements that do not qualify as business-type.  

In  addition,  the  Impact  Assessment  addresses  the  need  to  set  in  place  a  coherent,  uniform 
scheme for the registration of the beneficial ownership information of all trusts set up in the 
Union.  Thus,  starting  from  a  detailed  analysis  of  the  current  situation  and  the  problems 
encountered  in  practice  with  the  application  of  the  registration  system  set  out  by  the 
4AMLD, a number of options are analysed: (i) keeping the current system; (ii)  registration 
in  jurisdiction  of  the  governing  law  and  (iii)  registration  in  jurisdiction  of  administration. 
Option (iii) is retained as the most beneficial and the clearest, and supporting arguments are 
indicated: least cumbersome option for Member States, the easiest to apply. 

• 

Fundamental rights 

Article  6(1)  of  the  Treaty  on  European  Union  states  that  the  Union  recognises  the  rights, 
freedoms and principles set out in the Charter of Fundamental Rights.  

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The  proposed  measures  include  legal  provisions  to  adequately  respond  to  risks  relating  to 
financial crime, the evolving terrorist threats and the need for increased transparency. These 
measures  will  help  to  address  and  reduce  the  risk  of  terrorist  attacks.  While these  measures 
have as final objective the protection of the financial system, they aim to offer all guarantees 
in order to balance the need for increased security with the need to protect fundamental rights, 
including data protection, and economic freedoms. 

Fundamental rights enshrined in the Charter of particular significance to this proposal are the 
following:  the  right  to  private  and  family  life  (Article  7),  the  protection  of  personal  data 
(Article 8) and the freedom to conduct a business (Article 16 of the Charter).  

Extending the scope of the 4AMLD to virtual currency exchange platforms was duly analysed 
from  the  perspective  of  the  rights  to  private  life  and  the  protection  of  personal  data. 
AML/CFT  legislation  requires  obliged  entities  to  know  their  customers  –  as  well  as  certain 
other persons who are not always their customers (e.g. beneficial owners) – and to assess their 
associated money laundering and terrorist financing (ML/TF) risks. For that purpose, obliged 
entities  need to  collect, process and record personal  data, and sometimes to  share such  data 
with  public authorities (such as  FIUs)  or  with  private entities within the  same group.  These 
requirements  have  implications  for  private  persons  while  having  an  overall  security  impact 
(general  interest).  The  proposed  amendments  are  formulated  in  a  clear  and  proportionate 
manner, setting out the required safeguards, and the Commission considers this necessary in 
order to achieve the objectives of enhancing the effectiveness of the fight against ML/FT and 
complying  with  new  international  standards.  In  addition,  positive  effects  for  consumers  are 
expected as a result of the proposed rules on designating virtual currency exchange platforms 
as  obliged  entities.  Reducing  anonymity  surrounding  virtual  currencies  will  contribute  to 
increasing trust of their good-faith users. 

Similarly,  due  account  was  taken  of  the  need  to  respect  the  freedom  to  conduct  a  business, 
and while there will be an impact on market players becoming obliged entities and currently 
not performing any customer due diligence (CDD) on their customers, the ability to operate a 
virtual currency exchange platform is not affected by the proposed amendments.  

By lowering the thresholds foreseen by the 4AMLD in respect of due diligence performed for 
pre-paid instruments, it is ensured that EU legislation reflects current market practice for non-
reloadable cards, while at the same time respecting the needs and legitimate interests of users 
of such cards. The identification and verification of identity of the cardholders would only be 
requested  above  the  proposed  threshold  or  when  a  card,  reloadable  or  not,  is  used  for 
shopping online.  

The  reinforced  rules  on  access  to  beneficial  ownership  information  have  been  thoroughly 
analysed  from  the  perspective  of  ensuring  respect  of  Articles  7  and  8  of  the  Charter.  The 
amendments proposed seek to ensure a proper balance between the need to ensure protection 
of privacy and of personal data and the need for more transparency in financial and economic 
activities. By granting public access to beneficial ownership information for entities engaged 
in economic activities, additional guarantees to third parties wishing to do business with these 
companies  are  set  in  place.  This  allows  greater  scrutiny  of  information  by  civil  society, 
including by the press or civil society organisations, and contributes to preserving trust in the 
integrity of business transactions and of the financial system. The set of data made available 
to  the  public  is  strictly  limited  and  only  concerns  beneficial  owners  in  their  capacity  as 
economic actors. The conditions under which access to information on beneficial ownership is 
granted are redefined, and clear access rules are established through an amendment to the 1st 

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Company  Law  Directive  (Directive  2009/101/EC20),  the  Union  legal  act  that  lays  down  the 
rules  on  disclosure  of  company  documents  and  the  validity  of  obligations  entered  into  by  a 
company.  With  regard  to  trusts  and  other  legal  entities  that  qualify  as  business-type,  the 
Directive relies  on the concept of "legitimate interest" as  a condition to access to  beneficial 
ownership information. 

4. 

BUDGETARY IMPLICATIONS 

The proposal does not have a budgetary impact for the Union budget. 

5. 

• 

OTHER ELEMENTS 

Explanatory documents  

No  explanatory  documents  on  the  transposition  of  the  provisions  of  this  proposal  are 
considered  necessary  in  addition  to  those  already  required  from  Member  States  by  the 
provisions currently in force in both the 4AMLD and Directive 2009/101/EC. 

• 

Detailed explanation of the specific provisions of the proposal 

The amendments to the 4AMLD target the following items: 

A. Designate virtual currency exchange platforms as obliged entities 

Currently, Article 2 of the 4AMLD defines the obliged entities that are within the scope of the 
Directive. The Commission proposes to amend Article 2, in order to add to the list of obliged 
entities virtual  currency exchange platforms as well as custodian wallet providers. For legal 
certainty reasons, a definition of the term "virtual currency" is also proposed. 

Both  at  Union  and  international  level,  recent  analysis  has  provided  insights  into  the 
functioning of virtual currencies. A number of risks were highlighted especially in respect of 
providers  of  exchange  services  between  virtual  currencies  and  fiat  currencies.  Transactions 
with virtual currencies benefit from a higher degree of anonymity than classical financial fund 
transfers and therefore entail a risk that virtual currency may be used by terrorist organisations 
to conceal financial transfers. Possible further risks relate to the irreversibility of transactions, 
means of dealing with fraudulent operations, the opaque and technologically complex nature 
of the industry, and the lack of regulatory safeguards. 

Virtual currency transfers are currently not monitored in any way by public authorities within 
the EU, as no specific binding rules have been laid down, neither at Union level nor by the 
individual Member States, to set out conditions for such monitoring. To adequately respond to 
risks,  it  is  essential  to  provide  a  regulatory  framework  for  the  functioning  of  exchanges  as 
well  as  of  custodian  wallet  providers  that  operate  as  gatekeepers  permit  the  public  to  have 
access  to  the  various  schemes  of  virtual  currencies  As  obliged  entities  under  the  4AMLD, 
similarly  to  financial  institutions,  they  become  subject  to  the  obligation  to  implement 
preventive measures and report suspicious transactions.  

20 

Directive  2009/101/EC  of  the  European  Parliament  and  of  the  Council  of  16  September  2009  on 
coordination of safeguards which, for the protection of the interests of members and third parties, are 
required by Member States of companies within the meaning of the second paragraph of Article 48 of 
the Treaty, with a view to making such safeguards equivalent (OJ  L 258, 1.10.2009, p. 11). 

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The  proposed  measure  has  no  negative  effects  on  the  benefits  and  technological  advances 
presented  by  the  distributed  ledger  technology  underlying  virtual  currencies.  The  electronic 
distribution  of  digital  cash  offers  potential  efficiencies  and,  unlike  physical  cash,  it  brings 
with  it  a  ledger  of  transactions  that  is  absent  from  physical  cash.  This  proposal  takes  due 
account  of  these  advantages  and  acknowledges  the  fact  that  virtual  currencies  have 
highlighted innovative ways for governments to reduce fraud, corruption, error and the cost of 
paper-intensive  processes.  Similarly,  the  proposed  measure  is  mindful  of  the  fact  that  the 
virtual  currency  market  has  the  potential  to  set  in  place  new,  modern  ways  in  which 
governments  and  citizens  interact,  in  terms  of  data  sharing,  transparency  and  trust,  and  can 
provide novel insights into establishing ownership and provenance for goods and intellectual 
property. 

From a data protection perspective, new obliged entities are designated, and they will have to 
process  personal  data  (i.e.  by  performing  customer  due  diligence).  This  new  obligation 
established  for  public  policy  considerations  is  counter-balanced  by  the  insertion  of  clear 
definitions  of  the  obliged  entities,  who  are  informed  of  the  new  obligations  they  become 
subject to (collection and processing of financial personal data online) and the data protection 
elements that are specific to these obligations. 

B.  Set lower maximum transaction limits for certain pre-paid instruments 

Under Article 12 of the 4AMLD, any Member State may allow obliged entities not to apply 
certain  customer  due  diligence  (CDD)  measures  with  respect  to  electronic  money,  under 
certain conditions. Currently acknowledged terrorism financing risks posed by pre-paid cards 
are  linked  to  CDD  exempted  general  purpose  (reloadable  or  non-reloadable)  pre-paid  cards 
that run on domestic or international schemes and to the ease of using those cards online. 

The  Commission  proposes  to  (i)  lower  (from  250  to  150  EUR)  the  thresholds  in  respect  of 
non-reloadable  pre-paid  payment  instruments  to  which  such  CDD  measures  apply  and  (ii) 
suppress the CDD exemption for online use of prepaid cards.  

This  will  better  serve  identification  purposes  and  widen  customer  verification  requirements. 
Limiting  the  anonymity  of  prepaid  instruments  will  provide  an  incentive  to  use  such 
instruments for legitimate purposes only, and will make them less attractive for terrorist and 
criminal purposes. At the same time, pre-paid cards will still be an accessible instrument. The 
Commission  acknowledges  that  they  carry  a  social  value,  help  promote  financial  inclusion, 
and may be a useful instrument to buy goods and services online and as a substitute to bank 
accounts. 

The  proposed  measures  are  fully  in  line  with  rules  already  laid  down  by  the  4AMLD  in 
respect  of  pre-paid  cards,  and  would  not  require  additional  obligations  on  the  part  of 
distributors of such instruments. 

C. Enable FIUs to request information on money laundering and terrorist financing from any 
obliged entity  

In line with commitments undertaken in the European Agenda on Security, the Commission 
proposes to amend Article 32 of the 4AMLD to facilitate FIUs cooperation, aligning rules for 
their access to information with the latest international standards. 

FIUs play an important role in identifying the financial operations of terrorist networks across 
borders and in detecting their financial backers. The latest international standards emphasise 

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the importance of extending the scope of and the access to the information available to FIUs. 
That information is currently limited in certain Member States by the requirement that a prior 
suspicious transaction report has first been made by an obliged entity. FIUs should be able to 
obtain additional information from obliged entities, and should have access on a timely basis 
to  the  financial,  administrative  and  law  enforcement  information  they  require  to  undertake 
their functions properly even without there having been a suspicious transaction report. 

The  clarification  of  FIUs'  mandate  to  request  supplementary  information  from  any  obliged 
entity  and  have  direct  access  to  information  held  by  obliged  entities  will  ensure  that  the 
legislation in all Member States is aligned with international standards. This will better equip 
FIUs  to  collect  the  necessary  information  to  assess  suspicious  transaction  reports  more 
efficiently and speed up detection of terrorist financing and money laundering activities. The 
task  of  further  defining  the  conditions  under  which  such  requests  for  information  may  be 
made is left to the decision of the Member States. The Member States equally retain the right 
to adequately set out effective and proportional rules in respect of processing the information 
received.  An  FIU  must  respect  rules  governing  the  security  and  confidentiality  of  such 
information,  including  procedures  for  handling,  storage,  dissemination,  and  protection  of  as 
well as access to such information. 

D. Enable FIUs and competent authorities to identify holders of bank and payment accounts  

According to recital 57 of the 4AMLD, Member States are encouraged to put in place systems 
of  banking  registries  or  electronic  data  retrieval  systems  which  would  provide  FIUs  with 
access  to  information  on  bank  accounts.  Currently,  such  mechanisms  are  or  have  recently 
been put in place in a number of Member States. However, there exists no obligation at EU 
level to do so. 

As not all Member States have mechanisms in place allowing their FIUs to have timely access 
to  information  on  the  identity  of  holders  of  bank  and  payment  accounts,  some  FIUs  are 
hampered in the detection of criminal and terrorist financial flows at national level. Moreover, 
the FIUs concerned are also unable to exchange such information with their EU and non EU-
counterparts, which complicates cross-border preventative action.  

The  Commission  proposes  to  require  Member  States  to  set  up  automated  centralised 
mechanisms  enabling  to  swiftly  identify  holders  of  bank  and  payment  accounts.  This  will 
allow  Member  States  to  choose  between  setting  up  (i)  a  central  registry,  containing  the 
necessary data allowing for the identification of holders of bank and payment accounts, and 
granting their own national FIUs and AML/CFT competent authorities a full and swift access 
to the information kept in the registry, and (ii) other centralised mechanisms, such as central 
data retrieval systems, which allow  the same objective to be met. 

FIUs  and  other  AML/CFT  authorities  when  fulfilling  their  obligations  under  this  Directive 
must have efficient means to identify all bank and payment accounts belonging to one person 
through  a  centralised  automated  search  query.  This  will  lead  to  a  faster  detection  -  both 
nationally  and  internationally  -  of  suspicious  ML/TF  transactions,  and  improve  preventive 
action. 

This would allow Member States sufficient freedom in choosing the best means to attain the 
aim set out by the proposal. Where they set up a central mechanism, Member States will feed 
the  mechanism  with  a  harmonised  set  of  minimum  information,  and,  potentially,  other 
information they consider necessary and proportionate for the prevention of money laundering 

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and terrorist financing. They will further require the concerned financial institutions (or other 
entities) to periodically file or upload this information into the mechanism, and to define the 
technical  and  legal  conditions  for  access  to  information  by  FIUs  and  AML/CFT  competent 
authorities. 

At the same time, in order to respect privacy and protect personal data, such registries should 
store  the  minimum  data  necessary  to  the  performance  of  AML/CFT  investigations,  the 
concerned  data  subjects  should  be  informed  that  their  data  are  recorded  and  accessible  by 
FIUs and are given a  contact point for exercising  their rights  of access and rectification. At 
national  level,  maximum  retention  periods  (supported  by  adequate  reasoning  as  to  their 
duration) should be applicable to the registration of personal data in registries and provision 
should be made for their destruction once the information is no longer needed for the stated 
purpose. Access to such registries and databases should be limited on a "need to know" basis. 

E. Harmonise the EU approach towards high-risk third countries  

Article 18 of the Directive requires obliged entities to apply enhanced customer due diligence 
(ECDD  measures)  when  dealing  with  natural  or  legal  entities  established  in  high  risk  third 
countries.  Article  9  of  the  4AMLD  empowers  the  Commission  to  identify  –  by  way  of  a 
delegated act - high-risk third countries that have deficient AML/CFT regimes in place, and 
therefore  constitute  an  important  risk  for  terrorist  financing.  That  delegated  act  is  to  be 
adopted – and submitted to the scrutiny of the European Parliament and the Council – in July 
2016. 

However,  Member  States  are  not  at  present  required  to  include,  in  their  national  regimes,  a 
specific  list  of  ECDD  measures  and  thus,  heterogeneous  implementation  regimes  of  ECDD 
measures towards countries with deficiencies exist.  

Harmonisation  of  these  measures  will  avoid  or  at  the least  limit  the  risk  of  forum-shopping 
based on how jurisdiction apply more stringent or less stringent regulations towards high-risk 
third countries. Therefore, the regulatory gaps that could be exploited for ML/TF activities are 
addressed. 

The ECDD proposed measures are fully compliant with the lists of such actions drawn up by 
the  Financial  Action  Task  Force  ('FATF').  They  will  be  considered  as  a  minimum  set  of 
requirements to be applied by all Member States.  The implementation of this complete set of 
ECDD will grant a more complete monitoring of the transaction as it will encompass checks 
on the customer, the purpose and nature of the business relationship, the source of funds, and 
the monitoring of the transactions. In addition, through the systematic approval of the senior 
management, the processing of the financial transaction will grant higher scrutiny.  

In the same vein, the list of countermeasures set out by FATF should be adequately reflected 
in Union legislation, and this proposal sets out a non-exhaustive list of mitigating  measures 
Member States may decide to apply.  

F. Improve access to beneficial ownership information 

In  Articles  30  and  31,  the  4AMLD  sets  out  rules  on  the  collection,  storing  and  access  to 
information on the ultimate beneficial owner(s) of companies, trusts and other types of legal 
arrangements.  Currently,  those  entities  are  required  to  hold  accurate  information  on  their 
beneficial ownership. 

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The 4AMLD sets out a structured approach in respect to legal entities, differentiating between 
companies  and  trust  and  similar  legal  arrangements.  The  present  proposal  retains  that  
structure.  

- Corporate and other legal entities 

Pursuant to Article 30 of the 4 AMLD, any person or organisation demonstrating a legitimate 
interest  can  access  beneficial  ownership  information.  In  practice,  complex  ownership 
structures  have  been  used  to  obscure  links  to  criminal  activities,  tax  obligations,  the 
involvement of politically exposed persons and sanctioned individuals or jurisdictions. At the 
same time, differing approaches to transparency around ultimate beneficial owners also create 
challenges and confusion for companies, which need to dedicate significant resources to their 
own systems and controls, while investors, shareholders, and other stakeholders have to rely 
on publicly available and instantly accessible information about the control and ownership of 
listed companies. 

Understanding the beneficial ownership of companies is at the heart of the risk mitigation of 
financial  crime  and  of  prevention  strategies  for  regulated  firms.  In  addition,  within  the  EU 
framework, this aspect is at the core of a nexus between the preventive regime in the 4AMLD 
and company law, namely the Directive 2009/101/EC, the Union legal act that lays down the 
rules  on  disclosure  of  company  documents.  The  present  proposal  addresses  this  issue  by 
means  of  an  amendment  to  that  Directive  so  that  Member  States  will  be  required  to  ensure 
compulsory  disclosure  (public  access)  to  a  limited  set  of  information  on  beneficial  owners 
firms and legal entities engaging in profit-making activities as laid down in Article 54 TFEU. 
A good corporate governance infrastructure should combine transparency, accountability and 
integrity, and this includes knowledge of beneficial ownership.  

The requirement to grant public access to beneficial ownership information is well founded as 
it  will  provide  additional  guarantees  to  third  parties  wishing  to  do  business  with  those 
companies. The protection of minority investors and protection of stakeholders such as third 
parties  wishing  to  do  business  with  the  entity  or  structure  requires  access  to  reliable 
information about the ownership, including the identity of the controlling owners, and control 
structures of companies and trusts alike. 

Public  access  also  allows  greater  scrutiny  of  information  by  civil  society,  including  by  the 
press  or  civil  society  organisations,  and  contributes  to  preserving  trust  in  the  integrity  of 
business transactions and of the financial system. It can contribute to combating the misuse of 
legal entities and legal arrangements both by helping investigations and through reputational 
effects, given that anyone who could enter into transactions with them is aware of the identity 
of  the  beneficial  owner(s).    It  also  facilitates  the  timely  and  efficient  availability  of 
information    for    financial  institutions  as  well  as  authorities,  including  authorities  of  third 
countries, involved in the fight against these offences.  

- Trusts and other legal arrangements 

The  4AMLD  gives  competent  authorities  and  FIUs  access  in  a  timely  manner  to  beneficial 
ownership  of  trusts  and  other  legal  arrangements.  Obliged  entities  may  have  access  to  the 
information  within  the  framework  of  customer  due  diligence.  The  beneficial  ownership 
information concerns a wide range of legal arrangements: express trusts specific to common 
law,  but  also  similar  entities  such  as  Treuhand,  fiducies  or  fideicomiso,and  all  assimilated 
legal arrangements such as foundations. In addition, current rules require that, where a trust 

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generates  tax  consequences,  a  Member  State  must  have  in  place  a  register  containing  the 
beneficial ownership information. 

Many of these trusts and similar legal arrangements are involved in commercial or business-
like activities with a view to making profit, just like regular companies. Therefore, the same 
arguments  in  favour  of  public  access  to  beneficial  ownership  information  regarding  this 
particular  type  of  trusts  remain  valid.  The  regime  set  in  place  at  Union  level  in  respect  of 
access to information must be coherent and ensure public access to beneficial information of 
this category of legal entities.  

At the same time, trusts and similar legal arrangements may also be set up for other purposes: 
preserving and setting conditions on use of family assets, charitable aims, or other purposes 
beneficial to the community.  Such trusts and similar legal arrangements that do not qualify as 
business-type  benefit  from  a  different  regime  concerning  privacy.  The  essential  data  on 
beneficial owners of such entities shall only be granted to persons or organisations holding a 
legitimate  interest.  The  criteria  for  demonstrating  legitimate  interest  are  also  clarified,  by 
means of a recital. 

The  approach  proposed  takes  into  account  the  particularities  of  trusts  and  similar  legal 
arrangements. This way, irrespective of their qualification under national law, a distinction is 
drawn between, on the one hand, trusts which consist of any property held by or on behalf of 
a person carrying on a business which consists of or includes the management of trusts, and 
acting as trustee of a trust in the course of that business with a view to gain profit, and, on the 
other hand, any other trusts.  

Additional elements 

i) Corporate structures registered  

According  to  Article  3(6)(a)  of  the  4AMLD,  a  criterion  to  identify  the  beneficial  owner  of 
corporate  entities  is  a  threshold  for  shareholding  of  25%  plus  one  share  or  an  ownership 
interest of more than 25%. The Commission proposes to lower to 10% the threshold set out in 
the  4AMLD  in  respect  of  certain  limited  types  of  entities  which  present  a  specific  risk  of 
being used for money laundering and tax evasion.  

For intermediary entities that do not have any economic activity and only serve to distance the 
beneficial  owners  from  the  assets,  the  25%  threshold  is  fairly  easy  to  circumvent.  
Establishing a lower threshold where there is a specific risk will limit the scope of entities on 
which the obliged entities would need to collect additional information to those where the risk 
of use for illicit purposes is high. Accordingly, this enables the better detection of beneficial 
owner(s)  with  particular  focus  on  entities  that  function  as  intermediary  structures,  do  not 
create  income  on  their  own,  but  mostly  channel  income  from  other  sources  (defined  as 
Passive Non-Financial Entities under Directive 2011/16/EU).  

ii) Existing customers 

Under  Article  14(5)  of  the  4AMLD,  a  settlor  of  a  trust  is  identified  once  customer  due 
diligence  is  undertaken.  The  Commission  proposes  to  request  a  systematic  monitoring  of 
beneficial owners of existing customers like trusts, other legal arrangements and legal entities 
such as foundations.  

The potential source of funds/assets, where the risk of money laundering usually lies, cannot 
be  assessed  reliably  until  such  a  systematic  review  is  performed.  The  lack  of  systematic 

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monitoring does not allow detecting and assessing risks on time in certain cases. By applying 
customer due diligence to targeted existing customers, assessing the risk of money laundering 
and  terrorism  financing  on  time  and  reacting  to  it  may  be  hindered  by  a  lack  of  updated 
information on customers thus creating an opportunity to hide illicit money. 

In addition to the 4AMLD, other Union law rules are relevant in this regard and must be taken 
into  account.  The  scope  of  beneficial  ownership  information  under  4AMLD  directly  affects 
the reporting regime under Directive 2011/16/EU. The latter requires financial institutions to 
obtain  a  self-certification  with  respect  to  the  beneficial  owners  of  Passive  Non-Financial 
Entities that hold pre-existing accounts with a  balance over 1 million USD, as established in 
line  with  the    Common  Reporting  Standard  (‘CRS’)  developed  in  the  context  of  the 
Organisation  for  Economic  Co-operation  and  Development  (OECD).  Building  on  this 
obligation  imposed  on  the  financial  institution  to  contact  the  passive  non-financial  entity, 
synergies can be obtained by using this contact to update the beneficial ownership information 
in accordance with the latest standard of knowledge. 

iii) Place of monitoring and registration of trusts 

Under  Article  31  of  the  4AMLD,  Member  States  must  require  that  trusts  "governed  under 
their law" obtain and hold adequate, accurate and up-to-date information in particular on the 
trustee. The same article requires Member States to put in place, at national level, centralised 
registers of beneficial owners of trusts “which generate tax consequences”.  

The  Commission  proposes  to  clarify  that  the  Member  State  which  is  concerned  by  these 
obligations is the one where a trust is administered. 

The  current  criteria  relating  to  "governing  law"  and  "generating  tax  consequences"  are  not 
understood consistently and should be clarified. In particular, it might be considered, based on 
the current text of Article 31 that, as long as a Member State does not recognise trusts under 
its law, that Member State is not subject to any obligation of monitoring and registration of 
trusts administered on its territory. This  risks  creating gaps in  registration and is  not  in  line 
with the objectives of the transparency requirements of the Directive. Moreover, the limitation 
of  the  registration  requirement  only  to  trusts  which  generate  tax  consequences  is  not  fully 
consistent with the more encompassing obligation under the Directive to identify all types of 
trusts before entering into a business relationship. 

The  provision  of  the  current  Directive  is  also  inconsistent  in  the  sense  that  the  current 
registration requirement exempts from registration trusts that, due to lack of harmonisation of 
the  tax  systems,  fall  outside  the  scope  of  the  taxation  rules  of  Member  States  (e.g.  due  to 
having no tax residence anywhere). Such trusts not only do not pay taxes, but would also not 
be registered anywhere. 

The  Commission's  proposal  is  consistent  with  FATF  Guidance  on  Transparency  and 
Beneficial Ownership. 

iv) Interconnection of national registers 

The  4AMLD  stresses  the  need  to  ensure  a  safe  and  efficient  interconnection  of  national 
beneficial ownership registers. The Commission is tasked to draw up a report by June 2019 to 
assess 
the 
interconnection.  

technical  specifications  and  procedure  for  ensuring 

the  conditions  and 

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18 

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It is  of the utmost  importance  to  urgently  address  the risks  that  may  be  presented by  cross-
border misuse of legal entities and legal arrangements. As such, the Commission proposes to 
set up a direct interconnection of those registers.  

The interconnection will allow competent authorities, FIUs and obliged entities to identify the 
beneficial  owners  in  an  easiest  and  efficient  way,  and  it  will  increase  the  transparency 
requirements  on  companies  and  trusts.  It  will  also  allow  the  public  to  access  EU-wide  the 
beneficial ownership information. 

In  sum,  the  new  approach  to  corporate  transparency  and  access  to  beneficial  ownership 
information  addresses  all  the  aspects  that  currently  make  up  the  scheme  of  beneficial 
ownership information: what is registered (entities for which information is registered), where 
registration  must  take  place  (which  Member  State  is  responsible  for  registration  of  a  given 
entity),  who  is  granted  access  to  information  (clearer  access  to  information  on  beneficial 
ownership), how national registers should inter-relate. 

G. Clarify a number of existing provisions  

(i) Concept of competent authorities 

Despite  being  referenced  throughout  the  text  of  the  Directive,  the  term  "competent 
authorities"  is  not  always  clear.  This  has  led  to  divergent  interpretations  throughout  the 
Union. This proposal includes a recital clarifying this matter. 

(ii) Exclusion of closed loop cards 

Closed loop cards are prepaid cards which can be used to acquire goods or services only in the 
premises  of  the  issuer  or  within  a  limited  network  of  service  providers  under  direct 
commercial agreement with a professional issuer, or which can be used only to acquire a very 
limited  range  of  goods  or  services.  Taking  into  account  the  very  limited  money  laundering 
and  terrorist  financing  risks  linked  to  closed  loop  cards,  they  are  out  of  the  scope  of  the 
definition of e-money for the purposes of the 4AMLD, which is consistent with the approach 
in Directive 2009/110/EC21. 

(iii) Full consistency with provisions on electronic identification  

One of the objectives of the 4AMLD is to properly identify and verify parties (whether natural 
or  legal  persons)  to  a  transaction  and/or  a  payment.  Therefore,  electronic  identification  and 
trust services (governed by the eIDAS Regulation) are relevant when opening bank accounts 
or accessing funds and/or tracing electronic transactions. Currently, the eIDAS framework is 
one  of  the  cornerstones  of  the  Digital  Single  Market  covering  all  elements  of  an  electronic 
identification and authentication. 

The  4AMLD  should  be  updated  to  take  account  of  the  new  legal  framework  on  the  mutual 
recognition of notified eID schemes and means, clearly making reference to technical means 
set out in the eIDAS Regulation and eliminating any potential incompatibilities. 

21 

Directive  2009/110/EC  of  the  European  Parliament  and  of  the  Council  of  16  September  2009  on  the 
taking up, pursuit and prudential supervision of the business of electronic money institutions amending 
Directives 2005/60/EC and 2006/48/EC and repealing Directive 2000/46/EC (OJ L 267, 10.10.2009, p. 
7). 

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19 

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As  such,  references  to  electronic  means  of  identifications  set  out  by  the  eIDAS  Regulation 
must be included in Article 13(1), Article 27(2), Article 40(1)(a) and (b) as well as in Annex 
III to the 4AMLD. Copies of original documents as well as electronic assertions, attestations 
or credentials should be recognised as valid means of identity proof under the 4AMLD. 

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2016/0208 (COD) 

Proposal for a 

DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Directive (EU) 2015/849 on the prevention of the use of the financial system 
for the purposes of money laundering or terrorist financing and amending Directive 
2009/101/EC 

(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 
Articles 50 and 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 Central Bank22, 
Having regard to the opinion of the European Economic and Social Committee23, 

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

Directive (EU) 2015/849 of the European Parliament and the Council24 constitutes the 
main legal instrument in the prevention of the use of the Union's financial system for 
the purposes of money laundering and terrorist financing. That Directive, which is to 
be  transposed  by  26  June  2017,  sets  out  a  comprehensive  framework  to  address  the 
collection of money or property for terrorist purposes by requiring Member States to 
identify,  understand  and  mitigate  risks  related  to  money  laundering  and  terrorist 
financing. 

Recent  terrorist  attacks  have  brought  to  light  emerging  new  trends,  in  particular 
regarding  the  way  terrorist  groups  finance  and  conduct  their  operations.  Certain 
modern  technology  services  are  becoming  more  and  more  popular  as  alternative 
financial  systems  and  remain  outside  the  scope  of  Union  legislation  or  benefit  from 
exemptions that may no longer be justified. In order to keep pace with evolving trends, 
further measures to improve the existing preventive framework should be taken. 

(3)  While  the  aims  of  Directive  (EU)  2015/849  should  be  pursued,  any  amendments  to 
that  Directive  should  be  consistent  with  the  Union's  ongoing  action  in  the  field  of 

22 
23 
24 

OJ C […], […], p. […]. 
OJ C […], […], p. […]. 
Directive    (EU)  2015/849  of  the  European  Parliament  and  of  the  Council  of  20  May  2015  on  the 
prevention  of  the  use  of  the  financial  system  for  the  purposes  of  money  laundering  or  terrorist 
financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and 
repealing  Directive  2005/60/EC  of  the  European  Parliament  and  of  the  Council  and  Commission 
Directive 2006/70/EC (OJ L 141, 5.6.2015, p. 73). 

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21 

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(4) 

(5) 

(6) 

(7) 

countering  terrorism  and  terrorism  financing.  The  European  Agenda  on  Security25 
indicated the need for measures to address terrorist financing in a more effective and 
comprehensive  manner,  highlighting  that  infiltration  of  financial  markets  allows 
terrorism financing. The European Council conclusions of 17-18 December 2015 also 
stressed the need to take rapidly further action against terrorist finance in all domains. 

The  Commission  has  adopted  an  Action  Plan  to  further  step  up  the  fight  against  the 
financing  of  terrorism26  which  underscores  the  need  to  adapt  to  new  threats  and  to 
amend Directive (EU) 2015/849 to that effect. 

Union  measures  must  also  accurately  reflect  developments  and  commitments 
undertaken at international level. UN Security Council Resolution 2199 (2015) urges 
States  to  prevent  terrorist  groups  from  gaining  access  to  international  financial 
institutions. 

Providers of exchange services between virtual currencies and fiat currencies (that is 
to say currencies declared to be legal tender) as well as custodian wallet providers for 
virtual  currencies  are  under  no  obligation  to  identify  suspicious  activity.  Terrorist 
groups  are  thus  able  to  transfer  money  into  the  Union's  financial  system  or  within 
virtual  currency  networks  by  concealing  transfers  or  by  benefiting  from  a  certain 
degree of anonymity on those platforms. It is therefore essential to extend the scope of 
Directive  (EU)  2015/849  so  as  to  include  virtual  currency  exchange  platforms  and 
custodian wallet providers. Competent authorities should be able to monitor the use of 
virtual  currencies.  This  would  provide  a  balanced  and  proportional  approach, 
safeguarding  technical  advances  and  the  high  degree  of  transparency  attained  in  the 
field of alternative finance and social entrepreneurship. 

The credibility of virtual currencies will not rise if they are used for criminal purposes. 
In  this  context,  anonymity  will  become  more  a  hindrance  than  an  asset  for  virtual 
currencies  taking  up  and  their  potential  benefits  to  spread.  The  inclusion  of  virtual 
exchange platforms and custodian wallet providers will not entirely address the issue 
of  anonymity  attached  to  virtual  currency  transactions,  as  a  large  part  of  the  virtual 
currency environment will remain anonymous because users can also transact without 
exchange platforms or  custodian wallet  providers. To combat the risks  related to  the 
anonymity,  national  Financial  Intelligence  Units  (FIUs)  should  be  able  to  associate 
virtual  currency  addresses  to  the  identity  of  the  owner  of  virtual  currencies.  In 
addition,  the  possibility  to  allow  users  to  self-declare  to  designated  authorities  on  a 
voluntary basis should be further assessed.  

(8) 

Local  currencies  (also  known  as  complementary  currencies)  that  are  used  in  very 
limited networks such as a city or a region and among a small number of users should 
not be considered as virtual currencies. 

(9)  When  dealing  with  natural  persons  or  legal  entities  established  in  high-risk  third 
countries,  Member  States  must  require  obliged  entities  to  apply  enhanced  customer 
due  diligence  measures  to  manage  and  mitigate  risks.  Each  Member  State  therefore 
determines at national level the type of enhanced due diligence measures to be taken 
towards high-risk third countries. Those different approaches between Member States 

25 

26 

Communication  from  the  Commission  to  the  European  Parliament,  the  Council,  the  European 
Economic  and  Social  Committee  and  the  Committee  of  the  Regions  "The  European  Agenda  on 
Security",  COM(2015) 185 final. 
Communication from the Commission to the European Parliament and the Council on an Action Plan 
for strengthening the fight against terrorist financing, COM(2016) 50 final. 

EN 

22 

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create  weak  spots  on  the  management  of  business  relationships  involving  high  risk 
third countries identified by the Commission. Those gaps can be exploited by terrorists 
to channel funds in and out the Union financial system. It is important to improve the 
effectiveness of the list of high-risk third countries established by the Commission by 
providing  for  a  harmonised  treatment  of  those  countries  at  Union  level.  This 
harmonised  approach  should  primarily  focus  on  enhanced  customer  due  diligence 
measures.  Nevertheless,  Member  States  and  obliged  entities  should  be  allowed  to 
apply additional mitigating measures in addition to enhanced customer due diligence 
measures, in accordance with international obligations. International organisations and 
standard  setters  with  competence  in  the  field  of  preventing  money  laundering  and 
combating  terrorist  financing  may  call  to  apply  appropriate  counters  measures  to 
protect  the  international  financial  system  from  the  on-going  and  substantial  money 
laundering  and  terrorist  financing  risks  emanating  from  countries.  Member  States 
should  enact  and  apply  additional  mitigating  measures  regarding  high  risk  third 
countries 
into  account  calls  for 
countermeasures such as those expressed by the Financial Action Task Force (FATF). 

the  Commission  by 

identified  by 

taking 

(10)  Given  the  evolving  nature  of  ML/TF  threats  and  vulnerabilities,  the  Union  should 
adopt an integrated approach on the compliance of national AML/CFT regimes  with 
the  requirements  at  Union  level,  by  taking  into  consideration  an  effectiveness 
assessment  of  those  national  regimes.  For  the  purpose  of  monitoring  the  correct 
transposition  of  the  Union  requirements  in  the  national  regimes,  their  effective 
implementation  and  their  capacity  to  accomplish  a  strong  preventive  regime  in  the 
field, the Commission should base its assessment on the national risk regimes, which 
shall be without be without prejudice to those conducted by international organisations 
and standards setters with competence in the field of preventing money laundering and 
combating  terrorist  financing,  such  as  the  FATF  or  Committee  of  Experts  on  the 
Evaluation of Anti-Money Laundering Measures (MONEYVAL).  

(11)  General  purpose  prepaid  cards  have  legitimate  uses  and  constitute  an  instrument 
contributing to financial inclusion. However, anonymous prepaid cards are easy to use 
in financing terrorist attacks and logistics. It is therefore essential to deny terrorist this 
means  of  financing  their  operations,  by  further  reducing  the  limits  and  maximum 
amounts  under  which  obliged  entities  are  allowed  not  to  apply  certain  customer  due 
diligence  measures  provided  by  Directive  (EU)  2015/849.  Thus,  while  having  due 
regard  to  consumers'  needs  in  using  general  purpose  prepaid  instruments  and  not 
preventing the use of such instruments for promoting social and financial inclusion, it 
is  essential  to  lower  the  existing  thresholds  for  general  purpose  anonymous  prepaid 
cards and suppress the customer due diligence exemption for their online use.  

(12)  While the use of anonymous prepaid cards issued in the Union is essentially limited to 
the Union territory only, that is not always the case with similar cards issued in third 
countries.  It  is  therefore  important  to  ensure  that  anonymous  prepaid  cards  issued 
outside  the  Union  can  be  used  in  the  Union  only  where  they  can  be  considered  to 
comply  with  requirements  equivalent  to  those  set  out  in  Union  legislation.  The  rule 
should be enacted in full compliance with Union obligations in respect of international 
trade, especially the provisions of the General Agreement on Trade in Services.  

(13)  FIUs  play  an  important  role  in  identifying  the  financial  operations  of  terrorist 
networks, especially across borders, and in detecting their financial backers. Due to a 
lack  of  prescriptive  international  standards,  FIUs  maintain  significant  differences  as 
regards  their  functions,  competences  and  powers.  Those  differences  should  however 
not affect an FIU's activity, particularly its capacity to develop preventive analyses in 

EN 

23 

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support  of  all  the  authorities  in  charge  of  intelligence,  investigative  and  judicial 
activities, and international cooperation. FIUs should have access to information and 
be  able  to  exchange  it  without  impediments,  including  through  appropriate 
cooperation  with  law  enforcement  authorities.    In  all  cases  of  suspected  criminality 
and,  in  particular,  in  cases  involving  terrorism  financing,  information  should  flow 
directly and quickly without undue delays. It is therefore essential to further enhance 
FIUs'  effectiveness  and  efficiency,  by  clarifying  the  powers  of  and  cooperation 
between FIUs. 

(14)  FIUs  should  be  able  to  obtain  from  any  obliged  entity  all  the  necessary  information 
relating to their functions. Unfettered access to information is essential to ensure that 
flows  of  money  can  be  properly  traced  and  illicit  networks  and  flows  detected  at  an 
early  stage.  When  FIUs  need  to  obtain  additional  information  from  obliged  entities 
based on a suspicion of money laundering, such suspicion may be triggered by a prior 
suspicious transaction report reported to the FIU, but also through other means such as 
FIU's own analysis, intelligence provided by competent authorities or information held 
by another FIU. FIUs should therefore be able to obtain information from any obliged 
entity, even without a prior report being made by the individual obliged entity. A  FIU 
should  also  be  able  to  obtain  such  information  on  a  request  made  by  another  Union 
FIU and to exchange the information with the requesting FIU.  

(15)  Delayed access to information by FIUs and other competent authorities on the identity 
of holders of bank and payment accounts hampers the detection of transfers of funds 
relating  to  terrorism.  National  data allowing  the  identification  of  bank and  payments 
accounts belonging to one person is fragmented and therefore not accessible to FIUs 
and other competent authorities in a timely manner. It is therefore essential to establish 
centralised  automated  mechanisms,  such  as  a  register  or  data  retrieval  system  in  all 
Member States as an efficient means to get timely access to information on the identity 
of  holders  of  bank  and  payment  accounts,  their  proxy  holders,  and  their  beneficial 
owners. 

(16) 

In order to respect privacy and protect personal data, such registries should store the 
minimum  data  necessary  to  the  performance  of  AML  investigations.  The  concerned 
data subjects should be informed that their data are recorded and accessible by FIUs 
and  should  be  given  a  contact  point  for  exercising  their  rights  of  access  and 
rectification.  When  transposing  these  provisions,  Member  States  should  set  out 
maximum retention periods (supported by adequate reasoning as to their  duration) for 
the registration of personal data in registries and provide  for their destruction once the 
information  is  no  longer  needed  for  the  stated  purpose.  Access  to  the  registries  and 
databases should be limited on a need to know basis. 

(17)  Accurate identification and verification of data of natural and legal persons is essential 
for fighting money laundering or terrorist financing. Latest technical developments in 
the  digitalisation  of  transactions  and  payments  enable  a  secure  remote  or  electronic 
identification.  Those  means  of  identification  as  set  out  in  Regulation  (EU)  No 
910/2014  of  the  European  Parliament  and  of  the  Council27  should  be  taken  into 
account,  in  particular  with  regard  to  notified  electronic  identification  schemes  and 
means  that  offer  high  level  secure  tools  and  provide  a  benchmark  against  which 

27 

Regulation (EU) No 910/2014 of the European Parliament and the Council of 23 July 2014 on 
electronic identification and trust services for electronic transactions in the internal market and 
repealing Directive 1999/93/EC (OJ L 257, 28.8.2014, p. 73).  

EN 

24 

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assessing  the  identification  methods  set  up  at  national  level  may  be  checked. 
Therefore, it is essential to recognise secure electronic copies of original documents as 
well as electronic assertions, attestations or credentials as valid means of identity. 

(18)  The  beneficial  ownership  threshold  set  out  in  Article  3(6)(a)  of  Directive  (EU) 
2015/849  does  not  distinguish  between  genuine  commercial  corporate  entities  and 
those  that  have  no  active  business  and  are  mostly  used  as  an  intermediary  structure 
between the assets or income and the ultimate beneficial owner. For the latter, the set 
threshold  is  easily  circumvented,  leading  to  no  identification  of  the  natural  persons 
who  ultimately  own  or  control  the  legal  entity.  In  order  to  better  clarify  beneficial 
ownership information as regards intermediary structures that adopt a corporate form, 
it is necessary to establish a specific threshold from which indication of ownership is 
inferred. 

(19)  The approach for the review of existing customers in the current framework relies on a 
risk-based  approach.  However,  given  the  higher  risk  for  money  laundering,  terrorist 
financing  and  associated  predicate  offenses  associated  with  some  intermediary 
structures, that approach may not allow the timely detection and assessment of risks. It 
is  therefore  important  to  ensure  that  certain  clearly  specified  categories  of  already 
existing customers are also monitored on a methodical basis.  

(20)  Member States are currently required to ensure that legal entities incorporated within 
their  territory  obtain  and  hold  adequate,  accurate  and  current  information  on  their 
beneficial  ownership.  The  need  for  accurate  and  up-to-date  information  on  the 
beneficial  owner is  a  key factor in  tracing criminals  who  might otherwise be able to 
hide their identity behind a corporate structure. The globally interconnected financial 
system  makes  it  simple  to  hide  and  move  funds  around  the  world,  and  money 
launderers  and  terrorist  financers  as  well  as  other  criminals  have  increasingly    made 
use of that possibility.  

(21)  The specific factor determining the Member State responsible for the monitoring and 
registration  of  beneficial  ownership 
legal 
arrangements should be clarified. In order to avoid that, due to differences in the legal 
systems of Member States, certain trusts are not monitored or registered anywhere in 
the  Union,  all  trusts  and  similar  legal  arrangements  should  be  registered  where  they 
are  administered.  In  order  to  ensure  the  effective  monitoring  and  registration  of 
information on the beneficial ownership of trusts, cooperation among Member States 
is also necessary.    

trusts  and  similar 

information  of 

(22)  Public access by way of compulsory disclosure of certain information on the beneficial 
ownership of companies provides additional guarantees to third parties wishing to do 
business with those companies. Certain Member States have taken steps or announced 
their  intention  to  make  information  contained  in  registers  of  beneficial  ownership 
available to the public. The fact that not all Member States would make information 
publicly available or differences in the information made available and its accessibility 
may  lead  to  different  levels  of  protection  of  third  parties  in  the  Union.  In  a  well-
functioning internal market, there is a need for coordination to avoid distortions.  

(23)  Public access also allows greater scrutiny of information by civil society, including by 
the  press  or  civil  society  organisations,  and  contributes  to  preserving  trust  in  the 
integrity  of  business  transactions  and  of  the  financial  system.  It  can  contribute  to 
combating  the  misuse  of  legal  entities  and  legal  arrangements  both  by  helping 
investigations and through reputational effects, given that anyone who could enter into 
transactions  with  them  is  aware  of  the  identity  of  the  beneficial  owners.    It  also 

EN 

25 

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facilitates the timely and efficient availability of information  for  financial institutions 
as  well  as  authorities,  including  authorities  of  third  countries,  involved  in  the  fight 
against these offences.  

(24)  Confidence in financial markets from investors and the general public depends in large 
part on the existence of an accurate disclosure regime that provides transparency in the 
beneficial ownership and control structures of companies. This is particularly true for 
corporate governance systems that are characterized by concentrated ownership, such 
as the one in the Union. On the one hand, large investors with significant voting and 
cash-flow rights may encourage long-term growth and firm performance. On the other 
hand,  however,  controlling  beneficial  owners  with  large  voting  blocks  may  have 
incentives to divert corporate assets and opportunities for personal gain at the expense 
of minority investors. 

(25)  Member States should therefore allow access to beneficial ownership information in a 
sufficiently  coherent  and  coordinated  way,  through  the  central  registers  in  which 
beneficial  ownership  information  is  set  out,  by  establishing  a  clear  rule  of  public 
access,  so  that  third  parties  are  able  to  ascertain,  throughout  the  Union,  who  are  the 
beneficial  owners  of  companies.  It  is  therefore  necessary  to  amend  Directive 
2009/101/EC of the European Parliament and the Council28 in order to harmonise the 
national  provisions  on  disclosure  of  information  on  the  beneficial  ownership  of 
companies, particularly for the purpose of protecting the interests of third parties.  

(26)  A  fair  balance  should  be  sought  in  particular  between  the  general  public  interest  in 
corporate  transparency  and  in  the  prevention  of  money  laundering  and  the  data 
subjects' fundamental rights. The set of data to be made available to the public should 
be limited, clearly and exhaustively defined, and should be of a general nature, so as to 
minimize  the  potential  prejudice  to  the  beneficial  owners.    At  the  same  time, 
information made accessible to the public should not significantly differ from the data 
currently collected. In order to limit the interference with the right to respect for their 
private  life  in  general  and  to  protection  of  their  personal  data  in  particular,  that  that 
information should relate essentially to the status  of beneficial owners of  businesses 
and  trusts,  and  should  strictly  concern  the  sphere  of  economic  activity  in  which  the 
beneficial owners operate. 

(27)  The  disclosure  of  beneficial  ownership  information  should  be  designed  to  give 
governments  and  regulators  the  opportunity  to  respond  quickly  to  alternative 
investment  techniques,  such  as  cash-settled  equity  derivatives.  On  the  other  hand, 
legitimate majority shareholding should not be deterred from taking an active role in 
monitoring management in listed companies. For the functioning of financial markets 
that have become increasingly internationally-oriented and complex, it is essential that 
legal rules and requirements that enable information sharing on an international level 
be available and effectively implemented by national supervisory authorities. 

(28)  The personal data of beneficial owners should be publicly disclosed in order to enable 
third  parties  and  civil  society  at  large  to  know  who  the  beneficial  owners  are.  The 
enhanced  public  scrutiny  will  contribute  preventing  the  misuse  of  legal  entities  and 
legal  arrangements,  including  tax  avoidance.  Therefore,  it  is  essential  that  this 

28 

Directive  2009/101/EC  of  the  European  Parliament  and  of  the  Council  of  16  September  2009  on 
coordination of safeguards which, for the protection of the interests of members and third parties, are 
required by Member States of companies within the meaning of the second paragraph of Article 48 of 
the Treaty, with a view to making such safeguards equivalent (OJ L 258, 1.10.2009, p. 11). 

EN 

26 

   EN 

                                                 
information remains publicly available through the national registers and through the 
system of interconnection of registers for 10 years after the company has been struck 
off from the register. However, Member States should be able to provide by law for 
the processing of the information on beneficial ownership, including personal data for 
other purposes if such processing meets an objective of public interest and constitutes 
a  necessary  and  proportionate  measure  in  a  democratic  society  to  the  legitimate  aim 
pursued. 

(29)  Moreover, with the same aim of ensuring a proportionate and balanced approach and 
to  guarantee  the  rights  to  private  life  and  personal  data  protection,  Member  States 
should  provide  for  exemptions  to  the  disclosure  of  and  to  the  access  to  beneficial 
ownership  information  in  the  registers,  in  exceptional  circumstances,  where  the 
information  would  expose  the  beneficial  owner  to  the  risk  of  fraud,  kidnapping, 
blackmail, violence or intimidation. 

(30)  Directive  95/46/EC  of the European Parliament and of the Council  29, which will be 
replaced  by  Regulation  (EU)  2016/679  of  the  European  Parliament  and  of  the 
Council30, applies to the processing of personal data under this Directive. 

(31)  As  a  consequence,  natural  persons  whose  personal  data  are  held  in  the  national 
registers as beneficial ownership information should be informed of the publication of 
their personal data before that publication takes place. Furthermore, only the personal 
data that is up to date and corresponds to the actual beneficial owners should be made 
available and the beneficiaries should be informed about their rights under the current 
Union  legal  data  protection  framework,  as  set  out  in  Regulation  (EU)  2016/679  and 
Directive (EU) 2016/68031, and the procedures applicable for exercising these rights.  

(32)  This  Directive  is  without  prejudice  to  the  protection  of  personal  data  processed  by 
competent 
accordance  with  Council  Framework  Decision 
2008/977/JHA32, which will be replaced by Directive (EU) 2016/680 of the European 
Parliament and of the Council33. 

authorities 

in 

(33)  Currently,  companies  and  similar  legal  entities  active  in  the  Union  are  under  an 
obligation  to  register  their  beneficial  ownership  information,  whereas  the  same 
obligation  does  not  apply  to  all  trusts  and  other  legal  arrangements  which  present 

29 

30 

31 

32 

33 

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 data (OJ L 281 , 23.11.1995, p.31).  
Regulation  (EU)  2016/679  of  the  European  Parliament  and  of  the  Council  of  27  April  2016  on  the 
protection of natural persons with regard to the processing of personal data and on the free movement of 
such data, and repealing Directive 95/46/EC (General Data Protection Regulation) (OJ L 119, 4.5.2016, 
p. 1). 
Directive  (EU)  2016/680  of  the  European  Parliament  and  of  the  Council  of  27  April  2016  on  the 
protection of natural persons with regard to the processing of personal data by competent authorities for 
the  purposes  of  the  prevention,  investigation,  detection  or  prosecution  of  criminal  offences  or  the 
execution  of  criminal  penalties,  and  on  the  free  movement  of  such  data,  and  repealing  Council 
Framework Decision 2008/977/JHA (OJ L 119, 4.5.2016, p. 89). 
Council Framework Decision 2008/977/JHA of 27 November 2008 on the protection of personal data 
processed  in  the  framework  of  police  and  judicial  cooperation  in  criminal  matters  (OJ  L  350, 
30.12.2008, p. 60). 
Directive  (EU)  2016/680  of  the  European  Parliament  and  of  the  Council  of  27  April  2016  on  the 
protection of natural persons with regard to the processing of personal data by competent authorities for 
the  purposes  of  the  prevention,  investigation,  detection  or  prosecution  of  criminal  offences  or  the 
execution  of  criminal  penalties,  and  on  the  free  movement  of  such  data,  and  repealing  Council 
Framework Decision 2008/977/JHA (OJ L 119, 4.5.2016, p. 89). 

EN 

27 

   EN 

                                                 
(34) 

(35) 

similar characteristics such as Treuhand, fiducies or fideicomiso set up in the Union. 
With  a  view  to  ensure  that  the  beneficial  owners  of  all  legal  entities  and  legal 
arrangements  operating  in  the  Union  are  properly  identified  and  monitored  under  a 
coherent  and  equivalent  set  of  conditions,  rules  regarding  the  registration  of  the 
beneficial ownership information of trusts by their trustees should be consistent with 
those  in  place  in  respect  of  the  registration  of  beneficial  ownership  information  of 
companies.  

It  is  essential  to  take  into  account  the  particularities  of  trusts  and  similar  legal 
arrangements,  as  far  as  publicly  available  information  on  their  beneficial  owner  is 
concerned.  Irrespective of  their  qualification  under  national  law,  a  distinction  should 
be drawn between, on the one hand, trusts which consist of any property held by or on 
behalf  of  a  person  carrying  on  a  business  which  consists  of  or  includes  the 
management  of  trusts,  and  acting  as  trustee  of  a  trust  in  the  course  of  that  business 
with a view to gain profit, and, on the other hand, any other trusts. Given the nature of 
the  first  category  of  trusts,  information  on  their  beneficial  owners  should  be  made 
publicly available through compulsory disclosure. Access should be given to the same 
limited set of data on the beneficial owner as in the case of companies. 

In order to ensure proportionality, the beneficial ownership information in respect of 
any other  trusts than those  which consist  of any property held by, or  on behalf of, a 
person carrying on a business which consists of or includes the management of trusts, 
and acting as trustee of a trust in the course of that business with a view to gain profit 
should only be available to parties holding a legitimate interest. The legitimate interest 
with  respect  to  money  laundering,  terrorist  financing  and  the  associated  predicate 
offences  should  be  justified  by  readily  available  means,  such  as  statutes  or  mission 
statement of non-governmental organisations, or on the basis of demonstrated previous 
activities  relevant  to  the  fight  against  money  laundering  and  terrorist  financing  or 
associated  predicate  offences,  or  a  proven  track  record  of  surveys  or  actions  in  that 
field.  

(36)  With a view to ensure a coherent and efficient registration and information exchange, 
Member States should ensure that their authority in charge of the register set up for the 
beneficial  ownership  information  of  trusts  cooperates  with  its  counterparts  in  other 
Member States, sharing information concerning trusts governed by the law of the first 
Member State and administered in another Member State. 

(37) 

It  is  important  to  ensure  that  anti-money  laundering  and  terrorist  financing  rules  are 
correctly  implemented  by  obliged  entities.  In  that  context,  Member  States  should 
strengthen  the  role  of  public  authorities  acting  as  competent  authorities  with 
designated  responsibilities  for  combating  money  laundering  or  terrorist  financing, 
including  the  FIUs,  the  authorities  that  have  the  function  of  investigating  or 
prosecuting  money  laundering,  associated  predicate  offences  and  terrorist  financing, 
and  seizing  or  freezing  and  confiscating  criminal  assets,  as  well  as  anti-corruption 
authorities, tax authorities, authorities receiving reports on cross-border transportation 
of currency and bearer-negotiable instruments and authorities that have supervisory or 
monitoring responsibilities aimed at ensuring compliance by obliged entities. 

(38) 

In  accordance  with  the Joint  Political  Declaration  of  28  September  2011  of  Member 
States  and  the  Commission  on  explanatory  documents34,  Member  States  have 
undertaken  to  accompany,  in  justified  cases,  the  notification  of  their  transposition 

34 

OJ C 369, 17.12.2011, p. 14. 

EN 

28 

   EN 

                                                 
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.  

(39)  Since the objective of this Directive, namely the protection of the financial system by 
means  of  prevention,  detection  and  investigation  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,  but  can  rather,  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. 

(40)  This Directive respects the fundamental rights and observes the principles recognised 
by the Charter of Fundamental Rights of the European Union, in particular the right to 
respect for private and family life (Article 7 of the Charter), the right to the protection 
of personal data (Article 8 of the Charter), the freedom to conduct a business (Article 
16 of the Charter). 

(41)  Given the need to urgently implement measures adopted with a view to strengthen the 
Union's  regime  set  in  place  for  the  prevention  of  money  laundering  and  terrorism 
financing,  and  seeing    the  commitments  undertaken  by  Member  States  to  quickly 
proceed  with  the  transposition  of  Directive  (EU)  2015/849,  this  Directive  should  be 
transposed  by  1  January  2017.  For  the  same  reasons,  the  amendments  to  Directive 
(EU)  2015/849  and  Directive  2009/101/EC  should  also  be  transposed  by  1  January 
2017. 

(42)  The  European  Data  Protection  Supervisor  was  consulted  in  accordance  with  Article 
28(2) of Regulation (EC) No 45/2001 of the European Parliament and of the Council35 
[and delivered an opinion on …36], 

(43)  Directives  (EU)  2015/849    and    2009/101/EC  should  therefore  be  amended 

accordingly, 

HAVE ADOPTED THIS DIRECTIVE: 

Article 1 

Amendments to Directive (EU) 2015/849 

Directive (EU) 2015/849 is amended as follows: 

(1) 

in point (3) of Article 2(1), the following points (g) and (h) are added: 

35 

36 

Regulation (EC) No 45/2001 of the European Parliament and of the Council of 18 December 2000 on 
the  protection  of  individuals  with  regard  to  the  processing  of  personal  data  by  the  Community 
institutions and bodies and on the free movement of such data (OJ L 8, 12.1.2001, p.1). 
OJ C …   

EN 

29 

   EN 

 
                                                 
"(g)      providers  engaged  primarily  and  professionally  in  exchange  services  between 
virtual currencies and fiat currencies;  

(h)      wallet  providers  offering  custodial  services  of  credentials  necessary  to  access 
virtual currencies."; 

(2) 

Article 3 is amended as follows: 

(a) in point (6)(a)(i), the following subparagraph is added: 

"For  the  purposes  of  Article  13(1)(b)  and  Article  30  of  this  Directive,  the 
indication of ownership or control set out in the second  paragraph is reduced 
to 10% whenever the legal entity is a Passive Non-Financial Entity as defined 
in Directive 2011/16/EU."; 

(b) point (16) is replaced by the following: 

"(16)  'electronic  money'  means  electronic  money  as  defined  in  point  (2)  of 
Article 2 of Directive 2009/110/EC, but excluding monetary value as referred 
to in Article 1(4) and (5) of that Directive;" ; 

(c) the following point (18)  is added: 

"(18) 'virtual currencies' means a digital representation of value that is neither 
issued by a central bank or a public authority, nor necessarily attached to a fiat 
currency,  but  is  accepted  by  natural  or  legal  persons  as  a  means  of  payment 
and can be transferred, stored or traded electronically."; 

(3) 

Article 12 is amended as follows:  

(a) 

paragraph 1 is amended as follows: 

(i) in the first subparagraph, points (a) and (b) are replaced by the following: 

"(a)  the  payment  instrument  is  not  reloadable,  or  has  a  maximum 
monthly  payment  transactions  limit  of  EUR  150  which  can  be 
used only in that Member State;  

(b)  the  maximum  amount  stored  electronically  does  not  exceed 

EUR 150;"; 

(ii)  the second subparagraph is deleted;  

(b) 

paragraph 2 is replaced by the following: 

"2. Member States shall ensure that the derogation provided for in paragraph 1 
is not applicable in the case either of online payment or of redemption in cash 
or  cash  withdrawal  of  the  monetary  value  of  the  electronic  money  where  the 
amount redeemed exceeds EUR 50."; 

(c) 

the following paragraph 3 is added: 

"3 Member States shall ensure that Union credit institutions and financial institutions 
acting as acquirers only accept payments carried out with prepaid cards issued in third 
countries where such cards meet requirements equivalent to those set out in points (a), 
(b), (c) of the first subparagraph of Article 13(1) and Article 14, or can be considered 
to meet the requirements in paragraphs 1 and 2 of this Article.";  

(4) 

 in Article 13(1), point (a) is replaced by the following: 

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

EN 

30 

   EN 

including,  where  available,  electronic  identification  means  as  set  out  in  Regulation 
(EU) No 910/2014*;  

_________________________________________________________________ 

*  Regulation  (EU)  No  910/2014  of  the  European  Parliament  and  the  Council  of  23 
July 2014 on electronic identification and trust services for electronic transactions in 
the internal market and repealing Directive 1999/93/EC (OJ L 257, 28.8.2014, p. 73)." 

(5) 

in Article 14, paragraph 5 is replaced by the following: 

"5. Member States shall require that obliged entities apply the customer due diligence 
measures  not  only  to  all  new  customers  but  also  at  appropriate  times  to  existing 
customers on a risk-sensitive basis, or when the relevant circumstances of a customer 
change,  or  when  the  obliged  entity  has  a  duty  in  the  course  of  the  relevant  calendar 
year, to contact the customer for the purpose of reviewing any information related to 
the beneficial owner(s), in particular under Directive 2011/16/EU."; 

(6) 

in Article 18 (1), the first subparagraph is replaced by the following:  

"In the cases referred to in Articles 19 to 24, as well as in other cases of higher risk 
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."; 

(7) 

The following Article 18a is inserted: 

"Article 18a 

1. With respect to transactions involving high risk third countries, Member States shall 
require that, when dealing with natural persons or legal entities established in the third 
countries  identified  as  high-risk  third  countries  pursuant  to  Article  9  (2),  obliged 
entities  shall  apply  at  least  all  the  following  enhanced  customer  due  diligence 
measures:  

(a)  obtaining additional information on the customer; 

(b)  obtaining  addition  information  on  the  intended  nature  of  the 

business relationship; 

(c)  obtaining information on the source of funds or source of wealth of 

the customer; 

(d)  obtaining information on the reasons for the intended or performed 

transactions; 

(e)  obtaining  the  approval  of  senior  management  for  establishing  or 

continuing the business relationship; 

(f) 

conducting  enhanced  monitoring  of  the  business  relationship  by 
increasing the number and timing of controls applied, and selecting 
patterns of transactions that need further examination; 

(g) 

requiring the first payment to be carried out through an account in 
the customer's name with a bank subject to similar CDD standards. 

EN 

31 

   EN 

 
 
 
 
 
2.  In  addition  to  the  measures  provided  in  paragraph  1  and  in  compliance  with 
international  obligations  of  the  Union,  Member  States  may  require  obliged  entities, 
when  dealing  with  natural  persons  or  legal  entities  established  in  the  third  countries 
identified as high-risk third countries pursuant to Article 9(2) to apply one or several 
additional mitigating measures: 

requiring  financial  institutions  to  apply  additional  elements  of  enhanced  due 

(a) 
diligence; 

introducing enhanced relevant reporting mechanisms or systematic reporting of 

(b) 
financial transactions; 

 limiting business relationships or financial transactions with natural persons or 

(c) 
legal entities from the identified country. 

3. In addition to the measures provided in paragraph 1, Member States may apply one 
of  the  following  measures  to  third  countries  identified  as  high-risk  third  countries 
pursuant to Article 9(2) in compliance with international obligations of the Union: 

(a) 
refusing the establishment of subsidiaries or branches or representative offices 
of financial institutions from the country concerned, or otherwise taking into account 
the  fact  that  the  relevant  financial  institution  is  from  a  country  that  does  not  have 
adequate AML/CFT systems;  

(b) 
prohibiting  financial  institutions  from  establishing  branches  or  representative 
offices  in  the  country  concerned,  or  otherwise  taking  into  account  the  fact  that  the 
relevant  branch  or  representative  office  would  be  in  a  country  that  does  not  have 
adequate AML/CFT systems; 

prohibiting  financial  institutions  from  relying  on  third  parties  located  in  the 

(c) 
country concerned to conduct elements of the customer due diligence process; 

requiring financial institutions to review and amend, or if necessary terminate, 

(d) 
correspondent relationships with financial institutions in the country concerned; 

requiring increased supervisory examination or external audit requirements for 

(e) 
branches and subsidiaries of financial institutions based in the country concerned; 

requiring  increased  external  audit  requirements  for  financial  groups  with 

(f) 
respect to any of their branches and subsidiaries located in the country concerned. 

4.  When  enacting  or  applying  the  measures  set  out  in  paragraphs  2  and  3,  Member 
States  shall  take  into  account,  as  appropriate  relevant  evaluations,  assessments  or 
reports drawn up by international organisations and standard setters with competence 
in  the  field  of  preventing  money  laundering  and  combatting  terrorist  financing,  in 
relation to the risks posed by individual third countries. 

5.  Member  States  shall  notify  the  Commission  before  enacting  or  applying  the 
measures set out in paragraphs 2 and 3."; 

(8) 

in Article 27, paragraph 2 is replaced by the following: 

"2.   Member States shall ensure that obliged entities to which the customer is referred 
take adequate steps to ensure that the third party provides immediately, upon request, 
relevant copies of identification and verification data, including, where available, data 
obtained  through  electronic  identification  means  as  set  out  in  Regulation  (EU)  No 
910/2014,  and  other  relevant  documentation  on  the  identity  of  the  customer  or  the 
beneficial owner."; 

EN 

32 

   EN 

(9) 

Article 30 is amended as follows: 

(a)  in  paragraph  5,  point  (c)  of  the  first  subparagraph    and  the  second  subparagraph  
are deleted; 

(b) paragraph 6 is replaced by the following: 

"6.   The central register referred to in paragraph 3 shall ensure timely and unrestricted 
access by competent authorities and FIUs to all information held in the central register 
without  any  restriction  and  without  alerting  the  entity  concerned.  It  shall  also  allow 
timely  access  by  obliged  entities  when  taking  customer  due  diligence  measures  in 
accordance with Chapter II. 

Competent authorities granted access to the central register referred to in paragraph 3 
shall be those public authorities with designated responsibilities for combating money 
laundering or terrorist financing, including tax authorities and authorities that have the 
function  of  investigating  or  prosecuting  money  laundering,  associated  predicate 
offences  and  terrorist  financing,  tracing  and  seizing  or  freezing  and  confiscating 
criminal assets."; 

(c) paragraphs 9 and 10 are  replaced by the following: 

"9.   In  exceptional  circumstances  to  be  laid  down  in  national  law,  where  the  access 
referred to in point (b) of paragraph 5 would expose the beneficial owner to the risk of 
fraud, kidnapping, blackmail, violence or intimidation, or where the beneficial owner 
is a minor or otherwise incapable, Member States may provide for an exemption from 
such access to all or part of the information on the beneficial ownership on a case-by-
case basis.  

Exemptions granted pursuant to this paragraph shall not apply to credit institutions and 
financial institutions, and to the obliged entities as referred to in point (3)(b) of Article 
2(1) that are public officials. 

10. Member States shall ensure that the central registers referred to in paragraph 3 of 
this  Article  are  interconnected  via  the  European  Central  Platform  established  by 
Article 4a(1) of Directive 2009/101/EC. The connection of the Member States' central 
registers to the platform shall be set up in accordance with the technical specifications 
and  procedures  established  by  implementing  acts  adopted  by  the  Commission  in 
accordance with Article 4c of Directive 2009/101/EC.  

Member  States  shall  ensure  that  the  information  referred  to  in  paragraph  1  of  this 
Article  is  available  through  the  system  of  interconnection  of  registers  established  by 
Article  4a(2)  of  Directive  2009/101/EC,  in  accordance  with  Member  States'  national 
laws implementing paragraph 5 of this Article.  

Member States shall cooperate among themselves and with the Commission in order 
to implement the different types of access in accordance with paragraph 5."; 

(10) 

Article 31 is amended as follows: 

(a)  

paragraph 1 is replaced by the following: 

"1.    Member  States  shall  ensure  that  this  Article  applies  to  trusts  and  other  types  of 
legal arrangements having a structure or functions similar to trusts, such as, inter alia, 
fiducie, Treuhand or fideicomiso. 

EN 

33 

   EN 

 
 
Each Member State shall require that trustees of any express trust administered in that 
Member  State  obtain  and  hold  adequate,  accurate  and  up-to-date  information  on 
beneficial ownership regarding the trust. That information shall include the identity of: 

(a) the settlor;  
(b) the trustee;  
(c) the protector (if any); 
(d) the beneficiaries or class of beneficiaries;  
(e) any other natural person exercising effective control of the trust."; 

(b) 

the following paragraph 3a  is inserted: 

"3a.   The information referred to in paragraph 1 shall be held in a central register set 
up by the Member State where the trust is administered."; 

(c) 

paragraph 4 is replaced by the following: 

"4. Member States shall ensure that the information held in the register referred to in 
paragraph  3a  is  accessible  in  a  timely  and  unrestricted  manner  by  competent 
authorities  and  FIUs,  without  alerting  the  parties  to  the  trust  concerned.  They  shall 
also ensure that obliged entities are allowed timely access to that information, pursuant 
to the provisions on customer due diligence laid down in Chapter II. Member States 
shall notify to the Commission the characteristics of those mechanisms. 

Competent authorities granted access to the central register referred to in paragraph 3a 
shall be those public authorities with designated responsibilities for combating money 
laundering or terrorist financing, including, tax authorities and authorities that have the 
function  of  investigating  or  prosecuting  money  laundering,  associated  predicate 
offences  and  terrorist  financing  and  seizing  or  freezing  and  confiscating  criminal 
assets."; 

(d) 

the following paragraphs 4a and 4b are inserted: 

"4a.  The  information  held  in  the  register  referred  to  in  paragraph  3a  of  this  Article 
with  respect  to  any  other  trusts  than  those  referred  to  in  Article  7b  (b)  of  Directive 
(EC) 2009/101 shall be accessible to any person or organisation that can demonstrate a 
legitimate interest.  

The  information  accessible  to  persons  and  organisations  that  can  demonstrate  a 
legitimate  interest  shall  consist  of  the  name,  the  month  and  year  of  birth,  the 
nationality and the country of residence of the beneficial owner as defined in Article 
3(6)(b). 

4b.  Whenever  entering  into  a  new  customer  relationship  with  a  trust  or  other  legal 
arrangement  subject  to  registration  of  beneficial  ownership  information  pursuant  to  
paragraph  3a,  the  obliged  entities  shall  collect  proof  of  registration  whenever 
applicable."; 

(e) 

the following paragraph 7a is inserted: 

"7a.   In  exceptional  circumstances  laid  down  in  national  law,  where  the  access 
referred  to  in  paragraphs  4  and  4a  would  expose  the  beneficial  owner  to  the  risk  of 
fraud, kidnapping, blackmail, violence or intimidation, or where the beneficial owner 
is a minor or otherwise incapable, Member States may provide for an exemption from 
such access to all or part of the information on the beneficial ownership on a case-by-
case basis.  

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Exemptions  granted  pursuant  to  the  first    subparagraph  shall  not  apply  to  the  credit 
institutions and financial institutions, and to obliged entities referred to in point (3)(b) 
of Article 2(1) that are public officials. 

Where a Member State decides to establish an exemption in accordance with the first 
subparagraph, it shall not restrict access to information by competent authorities and 
FIUs."; 

(f) 

paragraph 8 is deleted; 

(g) 

paragraph 9 is replaced by the following: 

"9. Member States shall ensure that the central registers referred to in paragraph 3a of 
this  Article  are  interconnected  via  the  European  Central  Platform  established  by 
Article 4a(1) of Directive 2009/101/EU. The connection of the Member States' central 
registers to the platform shall be set up in accordance with the technical specifications 
and  procedures  established  by  implementing  acts  adopted  by  the  Commission  in 
accordance with Article 4c of Directive 2009/101/EC.  

Member  States  shall  ensure  that  the  information  referred  to  in  paragraph  1  of  this 
Article  is available through the system of interconnection of registers established by 
Article 4a(2)  of Directive 2009/101/EU, in  accordance with Member States' national 
laws implementing paragraphs 4 and 5 of this Article. 

Member States shall ensure that only the information referred to in paragraph 1 that is 
up  to  date  and  corresponds  to  the  actual  ownership  beneficiaries  is  made  available 
through their national registers and through the system of interconnection of registers, 
and the access to that information shall be in accordance with data protection rules.  

Member  States  shall  cooperate  with  the  Commission  in  order  to  implement  the 
different types of access in accordance with paragraphs 4 and 4a of this Article."; 

(h) 

the following paragraph 10 is added: 

"10. For the purposes of this Article, a trust is considered to be administered in each 
Member State where the trustees are established."; 

(11) 

Article 32 is amended as follows: 

in the first subparagraph of paragraph 3, the fourth sentence is replaced by the 

(a) 
following:  

"It shall be able to obtain and use information from any obliged entity."; 

(b) 

the following paragraph 9 is added: 

"9. In the context of its functions, each FIU shall be able to obtain from any obliged 
entity  information  for  the  purpose  set  in  paragraph  1  of  this  Article  ,  even  if  such 
obliged entity did not file a prior report pursuant to Article 33(1)(a)."; 

(12) 

the following Article 32a is inserted: 

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"Article 32a 

1. Member States shall put in place automated centralised mechanisms, such as central 
registries or central electronic data retrieval systems, which allow the identification, in 
a  timely  manner,  of  any  natural  or  legal  persons  holding  or  controlling  payment 
accounts  as  defined  in  Directive  2007/64/EC  and  bank  accounts  held  by  a  credit 
institution  within  their  territory.  Member  States  shall  notify  the  Commission  of  the 
characteristics of those national mechanisms. 

2. Member States shall ensure that the information held in the centralised mechanisms 
referred  to  in  paragraph  1  is  directly  accessible,  at  national  level,  to  FIUs  and 
competent  authorities  for  fulfilling  their  obligations  under  this  Directive.  Member 
States shall ensure that any FIU is able to provide information held in the centralised 
mechanisms  referred  to  in  paragraph  1  to  any  other  FIUs  in  a  timely  manner  in 
accordance with Article 53. 

3.  The  following  information  shall  be  accessible  and  searchable  through  the 
centralised mechanisms referred to in paragraph 1: 

for  the  customer-account  holder  and  any  person  purporting  to  act  on  behalf  of  the 
customer:  the  name,  complemented  by  the  other  identification  data  required  under 
the  national  provisions  transposing  Article  13(1)  (a)  or  a  unique  identification 
number; 

for the beneficial owner of the customer-account holder: the name, complemented by 
the  other  identification  data  required  under  the  national  provisions  transposing 
Article 13(1)(b) or a unique identification number;  

for the bank or payment account: the IBAN number and the date of account opening 
and closing."; 

– 

– 

– 

(13) 

in Article 33(1), point (b) is replaced by the following:  

"(b) 

providing the FIU directly, at its request, with all necessary information."; 

(14) 

in Article 39, paragraph 3 is replaced by the following: 

"3. The prohibition laid down in paragraph 1 shall not prevent disclosure between the 
credit institutions and financial institutions from the Member States provided that they 
belong  to  the  same  group,  or  between  these  entities  and  their  branches  and  majority 
owned  subsidiaries  established  in  third  countries,  provided  that  these  branches  and 
majority-owned  subsidiaries  fully  comply  with 
the  group-wide  policies  and 
procedures,  including  procedures  for  sharing  information  within  the  group,  in 
accordance  with  Article  42  and  that  the  group-wide  policies  and  procedures  comply 
with the requirements set out in this Directive."; 

(15) 

in Article 40, paragraph 1 is amended as follows: 

(a) 

points (a) and (b) are replaced by the following: 

"(a) 
in the case of customer due diligence, a copy of the documents and information 
which  are  necessary  to  comply  with  the  customer  due  diligence  requirements  laid 
down  in  Chapter  II,  including,  where  available,  information  obtained  through 

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electronic  identification  means  as  set  out  in  Regulation  (EU)  No  910/2014,  for  a 
period  of  five  years  after  the  end  of  the  business  relationship  with  their  customer  or 
after the date of an occasional transaction; 

(b) 
the supporting evidence and records of transactions, consisting of the original 
documents or copies admissible in judicial proceedings under the applicable national 
law, including, where available, information obtained through electronic identification 
means  as  set  out  in  Regulation  (EU)  No  910/2014,  which  are  necessary  to  identify 
transactions,  for  a  period  of  five  years  after  the  end  of  a  business  relationship  with 
their customer or after the date of an occasional transaction."; 

(b) 

the following subparagraph is added: 

"The  second  subparagraph  shall  also  apply  in  respect  of  the  data  accessible  through 
the centralised mechanisms referred to in Article 32a."; 

(16) 

in Article 47, paragraph 1 is replaced by the following:  

"1. Member States shall ensure that providers of exchanging services between virtual 
currencies  and  fiat  currencies,  custodian  wallet  providers,  currency  exchange  and 
cheque  cashing  offices,  and  trust  or  company  service  providers  are    licensed  or 
registered, and that providers of gambling services are  regulated."; 

(17) 

Article 49 is replaced by the following: 

"Article 49 

Member  States  shall  ensure  that  policy  makers,  the  FIUs,  supervisors  and  other 
competent  authorities  involved  in  AML/CFT,  such  as  tax  authorities,  have  effective 
mechanisms to enable them to cooperate and coordinate domestically concerning the 
development  and  implementation  of  policies  and  activities  to  combat  money 
laundering and terrorist financing, including with a view to fulfilling their obligation 
under Article 7."; 

(18) 

in Section 3 of Chapter VI, the following subsection IIa is added: 

"Subsection IIa 
Cooperation between competent authorities 

Article 50a 

Member  States  shall  not  prohibit  or  place  unreasonable  or  unduly  restrictive 
conditions  on  the  exchange  of  information  or  assistance  between  competent 
authorities. In particular Member States shall ensure that competent authorities do not 
refuse a request for assistance on the grounds that: 

(a) the request is also considered to involve tax matters;  

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(b) national legislation requires obliged entities to maintain secrecy or confidentiality, 
except  where  the  relevant  information  that  is  sought  is  held  in  circumstances  where 
legal privilege or legal professional secrecy applies;  

(c) there is an inquiry, investigation or proceeding underway in the requested Member 
State, unless the assistance would impede that inquiry, investigation or proceeding;  

(d) the nature or status of the requesting counterpart authority is different from that of 
requested competent authority."; 

(19) 

in Article 53, paragraph 1 is replaced by the following: 

"1.  Member  States  shall  ensure  that  FIUs  exchange,  spontaneously  or  upon  request, 
any information that may be relevant for the processing or analysis of information by 
the  FIU  related  to  money  laundering  or  terrorist  financing  and  the  natural  or  legal 
person involved, regardless of the type of associated predicate offences and even if the 
type of associated predicate offences is not identified at the time of the exchange.";  

(b) in the second subparagraph of paragraph 2, the second  sentence is replaced by the 
following:  

"That FIU shall obtain information in accordance with Article 32(9) and transfer the 
answers promptly."; 

(20) 

In Article 55, paragraph 2 is replaced by the following: 

"2. Member States shall ensure that the requested FIU's prior consent to disseminate 
the information to competent authorities is granted promptly and to the largest extent 
possible,  regardless  of  the  type  of  associated  predicate  offences.  The  requested  FIU 
shall  not  refuse  its  consent  to  such  dissemination  unless  this  would  fall  beyond  the 
scope  of  application  of  its  AML/CFT  provisions,  could  lead  to  impairment  of  a 
criminal investigation, would be clearly disproportionate to the legitimate interests of 
a  natural  or  legal  person  or  the  Member  State  of  the  requested  FIU,  or  would 
otherwise  not  be  in  accordance  with  fundamental  principles  of  national  law  of  that 
Member State. Any such refusal to grant consent shall be appropriately explained."; 

(21) 

Article 57 is replaced by the following: 

"Article 57 

Differences between national law definitions of tax crimes shall not impede the ability 
of  FIUs  to  provide  assistance  to  another  FIU  and  shall  not  limit  the  exchange, 
dissemination and the use of information pursuant to Articles 53, 54 and 55."; 

(22) 

in Article 65, the following second paragraph is added: 

"The  report  shall  be  accompanied,  if  necessary,  by  appropriate  proposals,  including, 
where  appropriate,  with  respect  to  virtual  currencies,  empowerments  to  set-up  and 

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maintain a central database registering users' identities and wallet addresses accessible 
to FIUs, as well as self-declaration forms for the use of virtual currency users."; 

(23) 

in Article 66, the first paragraph is replaced by the following: 

"Directives  2005/60/EC  and  2006/70/EC  are  repealed  with  effect  from  1  January 
2017."; 

(24) 

in Article 67(1), the first subparagraph is replaced by the following: 

"Member  States  shall  bring  into  force  the  laws,  regulations  and  administrative 
provisions  necessary  to  comply  with  this  Directive  by  1  January  2017.  They  shall 
immediately communicate the text of those measures to the Commission.“; 

(25) 

in point (2) of Annex III, point (c) is replaced by the following: 

"(c) non-face-to-face business relationships or transactions, without certain safeguards, 
such  as  electronic  identification  means  or  relevant  trust  services  as  defined  in 
Regulation (EU) 910/2014;". 

Article 2 

Amendments to Directive 2009/101/EC  

Directive 2009/101/EC is amended as follows: 

(1) in Chapter 1, the following Article 1a is inserted: 

Article 1a 

Scope 

The measures on the disclosure of information on the beneficial ownership apply in in 
respect  of  the  laws,  regulations  and  administrative  provisions  of  the  Member  States 
relating to: 

(a) corporate and other legal entities referred to in Article 30 of Directive 2015/849 of 
the  European  Parliament  and  of  the  Council*,  including  the  types  of  companies 
referred to in Article 1 of this Directive, save for those which are non profit-making; 

(b) trusts which comprise any property held by, or on behalf of, a person carrying on a 
business which consists of or includes the management of trusts, and acting as trustee 
of a trust in the course of that business with a view to gain profit, and other types of 
legal arrangements having a structure or functions similar to such trusts.  

___________________________________________________________________  

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*  Directive  (EU)  2015/849  of  the  European  Parliament  and  of  the  Council  of  20  May  2015  on  the 
prevention of the use of the financial system for the purposes of money laundering or terrorist financing, 
amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing 
Directive  2005/60/EC  of  the  European  Parliament  and  of  the  Council  and  Commission  Directive 
2006/70/EC (OJ L 141, 5.6.2015, p. 73)."; 

(2) in Chapter 2, the following Article 7b is inserted: 

"Article 7b 

Disclosure of beneficial ownership information 

1.  Member  States  shall  take  the  measures  required  to  ensure  compulsory  disclosure  by 
the entities referred to in Article 1a(a) and (b) of this Directive of adequate, accurate 
and current information on their beneficial ownership, in accordance with Articles 30 
and 31 of Directive 2015/849. 

The information shall consist of the name, the month and year of birth, the nationality 
and the country of residence of the beneficial owner as well as the nature and extent of 
the beneficial interest held. 

2.  The disclosure of beneficial ownership information as referred to in paragraph 1 shall 
be ensured through the central registers referred to in Article 30(3) and Article 31(3a)  
of Directive 2015/849. 

3.  Member  States  shall  ensure  that  the  beneficial  ownership  information  referred  to  in 
paragraph 1 of this Article shall also be made publicly available through the system of 
interconnection of registers referred to in Article 4a(2). 

4.  In  exceptional  circumstances  laid  down  in  national  law,  where  the  access  to  the 
information  set  out  in  paragraph  1  would  expose  the  beneficial  owner  to  the  risk  of 
fraud, kidnapping, blackmail, violence or intimidation, or where the beneficial owner 
is a minor or otherwise incapable, Member States may provide for an exemption from 
the  compulsory  disclosure  of  to  all  or  part  of  the  information  on  the  beneficial 
ownership on a case-by-case basis. 

5.   The personal data of beneficial owners referred to in paragraph 1 shall be disclosed for 
the  purpose  of  enabling  third  parties  and  civil  society  at  large  to  know  who  are  the 
beneficial  owners,  thus  contributing  to  prevent  the  misuse  of  legal  entities  and  legal 
arrangements through enhanced public scrutiny. For this purpose the information shall 
be  publicly  available  through  the  national  registers  and  through  the  system  of 
interconnection  of  registers  for  no  longer  than  10  years  after  the  company  has  been 
struck off from the register.". 

Article 3  

Transposition 

1. 

Member  States  shall  bring  into  force  the  laws,  regulations  and  administrative 
provisions necessary to  comply  with  this Directive by 1 January  2017 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. 

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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. 

Article 4 

Entry into force 

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

Article 5 

Addressees 

This Directive is addressed to the Member States. 

Done at Strasbourg, 

For the European Parliament 
The President 

For the Council 
The President 

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