CELEX: 51990PC0593
Language: en
Date: 1990-11-30
Title: AMENDMENT TO THE PROPOSAL FOR A COUNCIL DIRECTIVE ON PREVENTION OF USE OF THE FINANCIAL SYSTEM FOR THE PURPOSE OF MONEY LAUNDERING

19. 12.90                                       Official Journal of the European Communities                                                   No C 319/9
                                                                                II
                                                                       (Preparatory Acts)
                                                            COMMISSION
                      Amendment to the proposal for a Council Directive on prevention of use of the financial system
                                                     for the purpose of money laundering (')
                                                         COM(90) 593 final — SYN 254
                      (Submitted by the Commission pursuant to Article 149(3) of the EEC Treaty on 30 November
                                                                               1990)
                                                                        (90/C 319/12)
                      (') OJ No C 106, 28. 4. 1990, p. 6.
                             ORIGINAL PROPOSAL                                                                     AMENDED PROPOSAL
T H E COUNCIL OF T H E EUROPEAN COMMUNITIES                                          T H E COUNCIL OF T H E EUROPEAN COMMUNITIES
H a v i n g regard to the T r e a t y establishing the E u r o p e an      an        H a v i n g r e g a r d to the T r e a t y establishing the E u r o p e a n
E c o n o m i c C o m m u n i t y and in particular Article 57 (2),       2),        E c o n o m i c C o m m u n i t y and in particular Article 57 (2),
third sentence, thereof,                                                             first and third sentence, thereof,
                                     S e c o n d visa and r e m a i n d e r of t h e p r e a m b l e u n c h a n g e d
                                                         R e c i t a l s 1 to 1 1 u n c h a n g e d
                                                                                                                      Recital 1 la
                                                                                                                          (new)
                                                                                     W h e r e a s , in o r d e r to facilitate m o n e y laundering investi-
                                                                                     gations, credit and financial institutions should maintain
                                                                                     a d e q u a t e records of all transactions, in electronic or
                                                                                     written forms.
                                                             R e c i t a l 12 u n c h a n g e d
                                  Recital 13                                                                           Recital 13
W h e r e a s preserving the financial system from m o n ey                ey        W h e r e a s preserving the financial system from m o n e y
l a u n d e r i n g is a task which c a n n o t be carried o u t by the   he         l a u n d e r i n g is a task which c a n n o t be carried o u t by the
judicial and law enforcement authorities without the                      he         judicial a n d law enforcement authorities w i t h o u t the
c o o p e r a t i o n of credit and financial institutions a n d their    eir        c o o p e r a t i o n of credit and financial institutions and their
supervisory authorities; whereas banking secrecy must be                             supervisory authorities; w h e r e a s b a n k i n g secrecy must be
lifted in cases of criminal law; whereas a m a n d a t otry                ry        lifted in cases of criminal law; whereas a m a n d a t o r y
system of reporting suspicious transactions is the most                   i>st       system of reporting suspicious transactions which ensures
effective w a y to accomplish such c o o p e r a t i o n ; whereas; a                that information is transmitted to the m e n t i o n e d a u t h -
special protection clause is necessary to                          exempt ipt        orities w i t h o u t alerting the customers c o n c e r n e d , is the
employees a n d directors from responsibility by breaching                ng         most effective w a y to accomplish such c o o p e r a t i o n ;
restrictions on disclosure of information;                                           w h e r e a s a special protection clause is necessary to
                                                                                     exempt credit and financial institutions, their employees
                                                                                     and their directors from responsibility by b r e a c h i n g
                                                                                     restrictions on disclosure of i n f o r m a t i o n ;
 ---pagebreak---  N o C 319/10                            Official Journal of the European Communities                                         19. 12. 90
                       ORIGINAL PROPOSAL                                                         AMENDED PROPOSAL
                                                                                                     Recital 13a
                                                                                                        (new)
                                                                        Whereas the use of information received by the auth-
                                                                        orities pursuant to this Directive must be exclusively
                                                                        confined to money laundering investigations;
                                                    R e c i t a l 14 u n c h a n g e d
                                                                                                     Recital 14a
                                                                                                        (new)
                                                                        Whereas appropriate measures as well as effective and
                                                                        sufficient sanctions must be established for infringements
                                                                        of measures taken pursuant to the Directive.
                                                    R e c i t a l 15 u n c h a n g e d
HAS ADOPTED THIS DIRECTIVE:                                             HAS ADOPTED THIS DIRECTIVE:
                           Article 1                                                                  Artikel 1
For the purpose of this Directive,                                      For the purpose of this Directive,
— credit institution is defined in accordance with the                  — credit institution means a credit institution as defined
    first indent of Article 1 of Council Directive                           in accordance with the first indent of Article 1 of
    77/780/EECO;                                                             Council Directive 77/780/EEC Q) and a branch, as
                                                                             defined in indent 3 of Article 1 of that Directive, of a
                                                                             credit institution having its head office outside the
                                                                             Community;
— financial institution means an undertaking other than                 — financial institution means an undertaking other than
    a credit institution whose principal activity is to carry                a credit institution whose principal activity is to carry
    out one or more of the operations included in                            out one or more of the operations included in
    numbers 2 to 12 and 14 of the list annexed                               numbers 2 to 12 and 14 of the list annexed
    to Council Directive 89/646/EEC (2), as well as                          to Council Directive 89/646/EEC (2), as well as
    an insurance company duly authorized according                           an insurance company duly authorized according
    to     Council     Directives      73/239/EEC (3)         and            to       Council     Directives      73/239/EEC (3)    and
                                                                                               4
    79/267/EEC( );  4                                                        79/267/EEC ( ). This term shall also include
                                                                             branches of financial institutions having their head
                                                                             office outside the Community;
(') OJ  No  L 322, 17. 12. 1977, p. 30.                                 (')  OJ   No   L 322, 17. 12. 1977, p. 30.
(2) OJ  No  L 386, 30. 12. 1989, p. 1.                                  O    OJ   No   L 386, 30. 12. 1989, p. 1.
(>) OJ  No  L 228, 16. 8. 1973, p. 3.                                   (3)  OJ   No   L 228, 16. 8. 1973, p. 3.
O   OJ  No  L 63, 13. 3. 1979, p. 1.                                    (4)  OJ   No   L 63, 13. 3. 1979, p. 1.
 ---pagebreak--- 19. 12. 90                               Official Journal of the European Communities                             N o C 319/11
                         ORIGINAL PROPOSAL                                               AMENDED PROPOSAL
    money laundering means:
    — the conversion or transfer of property, knowing              unchanged
         that such property is derived from a serious
         crime, for the purpose of concealing or disguising
         the illicit origin of the property or of assisting any
         person who is involved in the commission of such
         an offence or offences to evade the legal conse-
         quences of his action, and
    — the concealment or disguise of the true nature,
         source, location, disposition, movement, rights
        with respect to, or ownership of property,
         knowing that such property is derived from a
         serious crime;
    property means assets of every kind, whether corporal          unchanged
    or incorporal, movable or immovable, tangible or
    intangible, and legal documents or instruments
    evidencing title to or interest in such assets;
    serious crime means a crime specified in Article 3,            unchanged
    paragraph 1 (a) and (c), of the United Nations
    Convention against illicit Traffic in Narcotic Drugs
    and Psychotropic Substances adopted on 19
    December 1988 in Vienna, terrorism and any other
    serious criminal offence (including in particular
    organized crime), connected or not with drugs, as
    defined by the Member States;
    competent authorities means the national authorities           unchanged
    which are empowered by laws or regulations to
    supervise credit or financial institutions.
                                                      Article 2 unchanged
                              Article 3                                                      Article 3
Member States shall ensure that credit and financial                1.   Member States shall ensure that credit and financial
institutions require identification of their customers when        institutions require identification of their customers when
entering into business relations or conducting trans-              entering into business relations or conducting trans-
actions, and in the case of doubt whether customers are            actions, and in the case of doubt whether customers are
acting on their own behalf, that these institutions take           acting on their own behalf, that these institutions take
reasonable measures to establish the real identity of the          reasonable measures to establish the real identity of the
persons on whose behalf a transaction is carried out or            persons on whose behalf a transaction is carried out or
an account is opened.                                              an account is opened.
 ---pagebreak--- No C 319/12                            Official Journal of the European Communities                                         19. 12.90
                      ORIGINAL PROPOSAL                                                        AMENDED PROPOSAL
Credit and financial institutions shall keep records of the            Credit and financial institutions shall keep records of the
identity documents required until at least five years after            identity documents required until at least five years after
relations with their clients have ended.                               relations with their clients have ended.
                                                                       2.      Credit and financial institutions shall not be obliged
                                                                       to carry out the identification requirements provided for
                                                                       in paragraph 1 when the customer in the business
                                                                       relationship or in the transaction is also a credit or
                                                                       financial institution subject to this Directive.
                                                                       3.      Credit and financial institutions shall keep adequate
                                                                       written or electronic records of transactions of any kind
                                                                       to serve as evidence in any subsequent money laundering
                                                                       investigation for a minimum period of 5 years from the
                                                                       time the transaction is completed.
                                                  A r t i c l e 4: u n c h a n g e d
                           Article 5                                                               Article 5
Member States shall ensure:                                            Member States shall ensure:
1. That credit and financial institutions and their                    1. That credit and financial institutions and their
   directors and employees fully cooperate with the                        directors and employees fully cooperate with the
   relevant judicial or law enforcement authorities                        relevant judicial or law enforcement authorities
   competent for criminal matters:                                         competent for criminal matters:
   — by informing these authorities, on their own                          — by informing these authorities, on their own
       initiative, of any facts they discover which could                       initiative, of any facts they discover which could
       be related to a money laundering offence;                                be related to a money laundering offence;
   — by furnishing these authorities with all information                  — by furnishing these authorities with all information
       requested in the case of any criminal inquiry or                         requested in the case of any criminal inquiry or
       rogatory commission on money laundering carried                          rogatory commission on money laundering carried
       out according to the applicable legislation;                             out according to the applicable legislation.
                                                                           The information referred to in this paragraph shall be
                                                                           transmitted to the abovementioned authorities of the
                                                                           Member State in whose territory the institution
                                                                           forwarding the information is situated.
                                                                           This information shall be transmitted, except in
                                                                           exceptional cases, through the person or persons
                                                                           designated by the credit and financial institutions, in
                                                                           accordance with the procedures provided for in
                                                                           Article 7, paragraph 1.
 ---pagebreak--- 19. 12. 90                              Official Journal of the European Communities                                    No C 319/13
                     ORIGINAL PROPOSAL                                                        AMENDED PROPOSAL
   That the disclosure in good faith to the relevant                    2. That the disclosure in good faith to the relevant
   judicial or law enforcement authorities competent for                    judicial or law enforcement authorities competent for
   criminal matters by any employee or director of a                        criminal matters by any employee or director of a
   credit or financial institution of any suspicion or belief               credit or financial institution of any suspicion or belief
   that an operation is aimed at or connected to money                      that an operation is aimed at or connected to money
   laundering, shall not constitute a breach of any                         laundering, shall not constitute a breach of any
   restriction on disclosure of information imposed by                      restriction on disclosure of information imposed by
   contract or by any legislative, regulatory or adminis-                   contract or by any legislative, regulatory or adminis-
   trative provision, and shall not involve for such                        trative provision, and shall not involve for such
   employees and directors any civil or penal responsi-                     employees, directors or institutions any civil or penal
   bility of any kind.                                                      responsability of any kind.
                                                                        3. Credit and financial institutions and their directors
                                                                            and employees shall not disclose to the customer
                                                                            concerned nor to other third persons that information
                                                                            has been transmitted to the authorities in accordance
                                                                            with paragraph 1 or that a money laundering investi-
                                                                            gation is being carried out.
                                                                        4. Information supplied to the authorities in accordance
                                                                            with paragraph 1 may be used only in connection
                                                                            with money laundering investigations.
                                                   A r t i c l e 6: u n c h a n g e d
                          Article 7                                                                Article 7
Member States shall ensure:                                             Member States shall ensure:
1. That credit and financial institutions establish                     1. unchanged
   adequate procedures of internal control in order to
   prevent, detect and impede their engaging in oper-
   ations related with money laundering.
2. That credit and financial institutions take the appro-                   That credit and financial institutions take the appro-
   priate measures so that their employees are aware of                     priate measures so that their employees are aware of
   the provisions contained in this Directive, and that                     the provisions contained in this Directive, and that
   they also establish special training programs for their                  they also establish special training programmes for
   employees, to help them detect operations which may                      their employees, to help them detect operations which
   be related with money laundering as well as to                           may be related with money laundering as well as to
   instruct them as to how to proceed in such cases.                        instruct them as to how to proceed in such cases.
                                                                            They shall ensure that all relevant employees
                                                                            participate in such training programmes.
                                                   A r t i c l e 8: u n c h a n g e d
                                                                                                  Article 8a
                                                                                                     (new)
                                                                        Each Member State shall take appropriate measures to
                                                                        ensure the application of the provisions of this Directive
                                                                        and in particular shall establish sufficient and effective
                                                                        sanctions to be applied to infringements of the measures
                                                                        adopted to comply with this Directive.
 ---pagebreak--- N o C 319/14                 Official Journal of the European Communities                                     19. 12. 90
             ORIGINAL PROPOSAL                                                   AMENDED PROPOSAL
                                         Article 9: unchanged
                                                                                     Article 9a
                                                                                       (new)
                                                             The Commission shall, one year after 1 January 1992
                                                             and at three-yearly intervals thereafter, draw up a report
                                                             on the application of this Directive and submit it to the
                                                             European Parliament and the Council
                                        A r t i c l e 10: u n c h a n g e d