CELEX: 52013PC0045
Language: en
Date: 2013-02-05
Title: Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing

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		52013PC0045
		
			Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing /* COM/2013/045 final - 2013/0025 (COD) */
			
				
		
		
			
			   	EXPLANATORY MEMORANDUM
1.           CONTEXT OF THE PROPOSAL
Grounds
for and objectives of the proposal
The main objectives of the measures
proposed are to strengthen the Internal Market by reducing complexity across
borders, to safeguard the interests of society from criminality and terrorist
acts, to safeguard the economic prosperity of the European Union by ensuring an
efficient business environment, to contribute to financial stability by
protecting the soundness, proper functioning and integrity of the financial
system. 
These objectives will be achieved by
ensuring consistency between the EU approach and the international one;
ensuring consistency between national rules, as well as flexibility in their
implementation; ensuring that the rules are risk-focused and adjusted to
address new emerging threats.
In addition, this proposal incorporates and
repeals Commission Directive 2006/70/EC of 1 August 2006 laying down
implementing measures for Directive 2005/60/EC[1],
thus improving the comprehensibility and accessibility of the anti-money
laundering (AML) legislative framework for all stakeholders.
The Commission intends to complement the
current proposal by strengthening the EU's repressive response to money
laundering. Consequently it is planned to propose criminal law harmonisation
for this offence based on Article 83(1) of the Treaty on the Functioning of the
European Union (TFEU) in 2013[2].
General
context
The breaking down of barriers within the
Internal Market facilitates not only the establishment or development of
legitimate businesses across the EU, but may also provide increased
opportunities for money laundering and terrorist financing. Criminals engaged
in money laundering could therefore attempt to conceal or disguise the true
nature, source or ownership of the assets in question and transform them into
seemingly legitimate proceeds. Moreover, terrorist financing can be funded
through both legitimate and criminal activities, as terrorist organisations
engage in revenue-generating activities which in themselves may be, or at least
appear to be, legitimate. Money
laundering and terrorism financing create thus a high risk to the integrity,
proper functioning, reputation and stability of the financial system, with
potentially devastating consequences for the broader society.
European legislation has been adopted to
protect the proper functioning of the financial system and of the Internal
Market. However, the changing nature of money laundering and terrorist
financing threats, facilitated
by a constant evolution of technology and of the means at the disposal of
criminals, requires a permanent adaptation of the legal framework to counter
such threats.
At the EU level, Directive 2005/60/EC of 26
October 2005 on the prevention of the use of the financial system for the
purpose of money laundering and terrorist financing[3] (hereinafter referred to as the
Third AMLD) sets out the framework designed to protect the soundness, integrity
and stability of credit and financial institutions and confidence in the
financial system as a whole, against the risks of money laundering and
terrorist financing. The EU rules are to a large extent based on international
standards adopted by the Financial Action Task Force (FATF) and, as the
Directive follows a minimum harmonisation approach, the framework is completed
by rules adopted at national level.
At international level, the FATF has
undertaken a fundamental review of the international standards and adopted a
new set of Recommendations in February 2012. 
In parallel to the international process,
the European Commission has been undertaking its own review of the European
framework. A revision of the Directive at this time is complementary to the
revised FATF Recommendations, which in themselves represent a substantial
strengthening of the anti-money laundering and combating terrorist financing
framework. The Directive itself further strengthens elements of the revised
Recommendations, in particular in relation to scope (by including providers of
gambling services and dealers in goods with a threshold of EUR 7 500),
beneficial ownership information (which is to be made available to obliged
entities and competent authorities), and in the provisions on sanctions. It
takes into account the necessity to increase effectiveness of AML measures by
adapting the legal framework to ensure that risk assessments are carried out at
the appropriate level and with the necessary degree of flexibility to allow
adaptation to the different situations and actors. As a consequence of this,
the Directive, while setting a high level of common standards, requires Member
States, supervisory authorities and obliged entities to assess risk and take
adequate mitigating measures commensurate to such risk. This results in the
Directive being less detailed as regards concrete measures to be taken.
Existing
provisions in this area
Various legal instruments have been adopted
to ensure an effective anti-money laundering and combating terrorist financing framework
at EU level. The most important ones are:
–                        
The Third AML Directive, which covers most of
the 40 FATF Recommendations and some of the 9 FATF Special Recommendations; 
–                        
Regulation (EC) No 1781/2006 of 15 November 2006
on information on the payer accompanying transfers of funds[4], which implements FATF SR VII
on wire transfers;
–                        
Regulation (EC) No 1889/2005 of 26 October 2005 on
controls of cash entering or leaving the Community[5], which implements FATF SR IX on
cash couriers;
–                        
Directive 2007/64/EC of 13 December 2007 on
payment services in the internal market[6]
(Payment Services Directive) which, in combination with the Third AMLD,
implements FATF SR VI on alternative remittance;
–                        
Regulation (EC) No 2580/2001 of 27 December 2001
on specific restrictive measures directed against certain persons and entities
with a view to combating terrorism[7]
which, together with Regulation (EC) No 881/2002 of 27 May 2002[8] implementing UN Al Qai'da and
Taliban sanctions, implements part of FATF SR III on freezing terrorist assets.
Consistency
with other policies and objectives of the Union 
The proposed adaptation of the anti-money laundering and combating terrorist financing framework is fully coherent with EU policies in other areas. In
particular:
–                        
the Stockholm Programme[9], which aims at achieving an
open and secure Europe serving and protecting citizens, calls on Member States
and the Commission to further develop information exchange between the FIUs, in
the fight against money laundering;
–                        
the EU's Internal Security Strategy[10] identifies the most urgent
challenges to EU security in the years to come and proposes five strategic
objectives and specific actions for 2011-2014 to help make the EU more secure.
This includes tackling money laundering and preventing terrorism. The need to
update the EU anti-money laundering and combating terrorist financing framework
with a view to enhancing the transparency of legal persons and legal
arrangements has been specifically recognised;
–                        
the potential for misuse of new technologies to
conceal transactions and hide identity makes it important for Member States to
be aware of technological developments and simulate the use of electronic
identification, electronic signature and trust services for electronic
transactions, in line with Commission’s proposal for a Regulation on electronic
identification and trust services for electronic transactions in the internal
market[11];
–                        
in March 2012, the European Commission adopted a
proposal on the freezing and confiscation of proceeds of crime in the EU[12] which seeks to ensure that
Member States have in place an efficient system to freeze, manage and
confiscate criminal assets, backed by the necessary institutional setup,
financial and human resources;
–                        
with respect to data protection, the proposed
clarifications to the Third AMLD are fully in line with the approach set out in
the Commission's recent data protection proposals[13], whereby a specific provision[14] empowers EU or national
legislation to restrict the scope of the obligations and rights provided for in
the draft regulation on a number of specified grounds, including the prevention,
investigation, detection and prosecution of criminal offences;
–                        
with respect to sanctions, the proposal to
introduce a set of minimum principles-based rules to strengthen administrative
sanctions is fully in line with the Commission's policy as outlined in its
Communication "Reinforcing sanctioning regimes in the financial services
sector"[15];
–                        
with respect to financial inclusion, the fact
that applying an overly cautious approach to anti-money laundering and combating
terrorist financing safeguards might have the unintended consequence of
excluding legitimate businesses and consumers from the financial system has
been recognised. Work has been carried out on this issue at international level[16] to provide guidance to support
countries and their financial institutions in designing anti-money laundering
and combating terrorist financing measures that meet the national goal of
financial inclusion, without compromising the measures that exist for the
purpose of combating crime. At EU level, the issue of financial inclusion is
currently under consideration as part of the work on a Bank Accounts package;
–                        
with respect to the cooperation with persons or
authorities (including courts and administrative bodies) concerned with the
assessment of, collection of, the enforcement or prosecution in respect of, or
the determination of appeals in relation to taxes and any other public levy,
the proposal is consistent with the approach for fighting against tax fraud and
tax evasion[17]
followed at international level in including a specific reference to tax crimes
within the serious crimes which can be considered as predicate offences to
money laundering. The enhancement of the customer due diligence procedures for
AML purposes will also assist the fight against tax fraud and tax evasion.
2.           RESULTS OF CONSULTATIONS WITH THE
INTERESTED PARTIES AND IMPACT ASSESSMENTS
Consultation
of interested parties
The Commission adopted in April 2012 a
report on the application of the Third AMLD and solicited comments from all
stakeholders. The report focused on a number of identified key themes (e.g.
including application of a risk-based approach, extending the scope of the
existing framework, adjusting the approach to customer due diligence,
clarifying reporting obligations and supervisory powers, enhancing FIU
co-operation etc.), which were essential for the review of the Third AMLD. 
The Commission received 77 contributions
from public authorities, civil society, business federations and companies in
several fields (including financial services, gambling sector, liberal
professions, real estate sector, trust and company service providers),
representing a broad variety of stakeholders. An additional number of comments,
position papers and contributions were received outside the consultation. 
The overall results of the consultation[18] point to a general
confirmation of the issues and problems highlighted by the Commission's Report,
as well as broad support for the proposed alignment to the revised FATF
standards and for greater clarification in certain areas (i.e. data protection
and how to apply the rules in cross-border situations). 
Use of
expertise
Substantial efforts have been made to
obtain evidence in this field and to ensure full engagement of the different
stakeholders.
In particular, over the course of 2010, a
study by external consultants Deloitte[19]
was carried out on behalf of the Commission to look into the application of the
Third AML Directive. 
Impact
assessment
The Commission has undertaken an Impact
Assessment[20],
where it analysed the potential consequences of money laundering and terrorism
financing. In particular, the financial system failing to prevent money
laundering and terrorist financing can lead to negative economic impacts
(arising from disruptions to international capital flows, reduced investment
and lower economic growth) and financial market instability (resulting from
reluctance of other financial intermediaries to engage in business, loss of
reputation, drop in confidence and prudential risks). 
The following problem drivers were
examined: 
–                        
the different application of existing EU rules
across Member States, leading to reduced legal certainty;
–                        
the inadequacies and loopholes with respect to
the current EU rules;
–                        
the inconsistency of the current rules with the
recently revised international standards.
This requires the achievement of the
following operational objectives: 
–                        
ensure consistency between national rules and,
where appropriate, flexibility in their implementation by strengthening and
clarifying current requirements; 
–                        
ensure that the rules are risk-focused and
adjusted to address new emerging threats, by strengthening and clarifying
current requirements;
–                        
ensure that the EU approach is consistent with
the approach followed at international level by extending the scope of application,
strengthening and clarifying the current requirements.
The impact assessment concluded that the
best options to improve the existing situation would be: 
–                        
Broadening scope to cover gambling: broaden the scope of the Directive beyond "casinos" to
cover the gambling sector;
–                        
Thresholds for traders in goods: reduce the scope and customer due diligence thresholds for traders
in high value goods from EUR 15 000 to EUR 7 500 for cash transactions;
–                        
Sanctions regimes:
introduce a set of minimum principles-based rules to strengthen administrative
sanctions;
–                        
Comparability of statistical data: reinforce and make more precise the requirement regarding the
collecting and reporting of statistical data;
–                        
Data protection:
introduce provisions in the Directive to clarify the interaction between
anti-money laundering/combating terrorist financing and data protection
requirements;
–                        
Inclusion of tax crimes in the scope: include an explicit reference to tax crimes as a predicate
offence;
–                        
Availability of beneficial owner information: require all companies to hold information on their beneficial
owners;
–                        
Identification of Beneficial Owner (BO): maintain the approach which requires identification of the BO as of
a 25% ownership threshold, but clarify what the "25% threshold" refers
to;
–                        
Home and host supervisory responsibilities
for AML: introduce new rules clarifying that
branches and subsidiaries situated in other Member States than the head office
apply host state AML rules and reinforce cooperation arrangements between home and
host supervisors;
–                        
Cross-border cooperation between Financial
Intelligence Units (FIUs): introduce new
requirements that would strengthen FIU powers and cooperation;
–                        
National Risk Assessments: introduce a requirement for Member States to carry out a risk
assessment at national level and take measures to mitigate risks;
–                        
Customer Due Diligence: Member States to ensure that enhanced due diligence must be
conducted in certain situations of high risk, while allowing them to permit
simplified due diligence in lower risk situations;
–                        
Equivalence of third country regimes: remove the "white list" process;
–                        
Risk-Sensitive Approach to supervision: specific recognition in the Directive that supervision can be
carried out on a risk-sensitive basis;
–                        
Treatment of Politically Exposed Persons
(PEPs): introduce new requirements for domestic
PEPs/PEPs working in international organisations, with risk-sensitive measures
to be applied.
In addition, the impact assessment analysed
the impact of the legislative proposals on Fundamental Rights. In line with the
Charter of Fundamental rights, the proposals seek in particular to ensure
protection of personal data (Article 8 of the Charter) by clarifying the
conditions under which personal data can be stored and transferred. The proposals
will bring no change and therefore have no impact on the right to an effective
remedy and to a fair trial (Article 47 of the Charter) which are not infringed
by the Directive as confirmed by the European Court of Justice (case C-305/05).
The respect for private life (Article 7), the freedom to conduct a business
(Article 16) and the prohibition of discrimination (Article 21) have been duly
taken into account. Finally, the proposal will indirectly help to protect the
right to life (Article 2 of the Charter).
3.           LEGAL ELEMENTS OF THE PROPOSAL
Legal
basis
The current proposal is based on Article
114 TFEU. 
Subsidiarity
and proportionality
In accordance with the principles of
subsidiarity and proportionality as set out in Article 5 of the Treaty on
European Union, the objectives of the proposal cannot be sufficiently achieved
by Member States and can therefore be better achieved at the Union level. The
proposal does not go beyond what is necessary to achieve those objectives.
Recital 2 of the Third AMLD underlines the
necessity of having measures at the EU level aiming at protecting the
soundness, integrity and stability of credit and financial institutions and
confidence in the financial system as a whole, "in order to avoid Member
States adopting measures to protect their financial systems which could be
inconsistent with the functioning of the internal market and with the
prescriptions of the rule of law and Community public policy, Community action
in this area is necessary".
As massive flows of dirty money and
terrorist financing can damage the stability and reputation of the financial
sector and threaten the internal market, any measures adopted solely at
national level could have adverse effects on the EU Single Market: an absence
of coordinated rules across Member States aimed at protecting their financial
systems could be inconsistent with the functioning of the internal market and
result in fragmentation. EU action is also justified in order to maintain a
level playing field across the EU – with entities in all Member States subject
to a consistent set of anti-money laundering and combating terrorist financing
obligations.
The Commission considers that the proposed
rule changes are proportionate to the objectives. By imposing thresholds on
scope and customer due diligence, the Commission has taken proportionate steps
to limit the applicability of the Directive, where appropriate. In addition,
the Directive allows certain of the preventative measures to be taken by SMEs
to be proportionate to the size and nature of the obliged entity. At the same
time, by ensuring a tailored and flexible risk-based approach, Member States
should not be constrained from adopting measures and taking actions as
necessary to counter important threats they may confront at national level.
These measures are better suited to a Directive than a fully harmonised
Regulation, with the inclusion of processes at EU level to ensure greater
coordination and the development of supranational approaches, together with
further harmonisation in specific areas ensuring that EU objectives are also
met. Although ensuring an effective AML/counter terrorism financing system
entails some cost for obliged entities (these costs have been analysed in the
Impact Assessment), the Commission considers that the benefits associated with
preventing money laundering and terrorist financing will continue to outweigh
the costs.
The evaluation of the new international
standards will begin in the fourth quarter of 2013. Unless the Commission
provides clear and early indications of the desired EU approach to their
implementation, there is a risk that those EU Member States who will be
evaluated first will opt for solutions which may not coincide with the proposed
EU approach, thus rendering agreement of common EU rules more difficult.
Finally, with the adoption of revised
international standards, commitments have been taken by the Commission as well
as all EU Member States (either directly or via their membership of FATF or
Moneyval) to ensure their implementation.
4.           BUDGETARY IMPLICATION 
The proposal has no implication for the
budget of the European Union.
5.           ADDITIONAL INFORMATION 
Detailed
explanation of the proposal
The main modifications to the Third AMLD
are:
–                        
Extension of the scope of the Directive: two main changes are proposed to the scope: 
(a)         
the threshold for traders in high value goods
dealing with cash payments be reduced from EUR 15 000 to EUR 7 500. Currently
traders in goods are included in the scope of the Directive if they deal with
cash payments of EUR 15 000 or more. After receiving information from Member
States that this relatively high threshold was being exploited by criminals it
is proposed to lower it to EUR 7 500. In addition, the new proposal requires
traders to carry out customer due diligence when carrying out an occasional
transaction of at least EUR 7 500, a reduction from the previous threshold of
EUR 15 000. Both the definition and the threshold show a tightening of measures
against the use of these traders for money laundering purposes across the EU;
(b)         
the scope of the Directive includes
"providers of gambling services" (in accordance with Directive
2000/31/EC of 8 June 2000 on certain legal aspects of information society
services, in particular electronic commerce, in the Internal Market[21]). The current Third AMLD and
the revised FATF Recommendations require that only casinos be included in the
scope of anti-money laundering/combating terrorist financing legislation.
Evidence in the EU suggests that this leaves other areas of gambling vulnerable
to miss-use by criminals.
–                        
Risk-based approach: The Directive recognises that the use of a risk-based approach is
an effective way to identify and mitigate risks to the financial system and
wider economic stability in the internal market area. The new measures proposed
would require evidence-based measures to be implemented in three main areas,
each of which would be supplemented with a minimum list of factors to be taken
into consideration or guidance to be developed by the European Supervisory
Authorities:
(a)         
Member States will be required to identify,
understand and mitigate the risks facing them. This can be supplemented by risk
assessment work carried out at a supra-national level (e.g. by the European
Supervisory Authorities or Europol) and the results should be shared with other
Member States and obliged entities. This would be the starting point for the
risk-based approach, and would recognise that an EU-wide response can be
informed by Member States' national experience; 
(b)         
Obliged entities operating within the scope of
the Directive would be required to identify, understand and mitigate their
risks, and to document and update the assessments of risk that they undertake.
This is a key element of the risk-based approach, allowing competent
authorities (such as supervisors) within Member States to thoroughly review and
understand the decisions made by obliged entities under their supervision.
Ultimately, those adopting a risk-based approach would be fully accountable for
the decisions they make; 
(c)         
The proposal would recognise that the resources
of supervisors can be used to concentrate on areas where the risks of money
laundering and terrorist financing are greater. The use of a risk-based
approach would mean that evidence is used to better target the risks.
–                        
Simplified and Enhanced Customer Due
Diligence: in the proposal, obliged entities would
be required to take enhanced measures where risks are greater and may be
permitted to take simplified measures where risks are demonstrated to be less. With
regard to the current (Third) AMLD, the provisions on simplified due diligence
were found to be overly permissive, with certain categories of client or
transaction being given outright exemptions from due diligence requirements.
The revised Directive would therefore tighten the rules on simplified due
diligence and would not permit situations where exemptions apply. Instead,
decisions on when and how to undertake simplified due diligence would have to
be justified on the basis of risk, while minimum requirements of the factors to
be taken into consideration would be given. In one of the situations where
enhanced due diligence should always be conducted, namely for politically
exposed persons, the Directive has been strengthened to include politically
exposed persons who are entrusted with prominent public functions domestically,
as well as those who work for international organisations.
–                        
Information on the beneficial owner: the revised Directive proposes new measures in order to provide
enhanced clarity and accessibility of beneficial ownership information. It
requires legal persons to hold information on their own beneficial ownership.
This information should be made available to both competent authorities and obliged
entities. For legal arrangements, trustees are required to declare their status
when becoming a customer and information on beneficial ownership is similarly
required to be made available to competent authorities and obliged entities. 
–                        
Third country equivalence: the revised Directive will remove the provisions relating to
positive "equivalence", as the customer due diligence regime is
becoming more strongly risk-based and the use of exemptions on the grounds of
purely geographical factors is less relevant. The current provisions of the
Third AMLD require decisions to be made on whether third countries have anti-money
laundering/combating terrorist financing systems that are
"equivalent" to those in the EU. This information was then used to
allow exemptions for certain aspects of customer due diligence. 
–                        
Administrative sanctions: in line with Commission policy to align administrative sanctions,
the revised Directive contains a range of sanctions that Member States should
ensure are available for systematic breaches of key requirements of the
Directive, namely customer due diligence, record keeping, suspicious
transaction reporting and internal controls.
–                        
Financial Intelligence Units: the proposal would bring in the provisions of Council Decision
2000/642/JHA
of 17 October 2000 concerning arrangements for
cooperation between financial intelligence units of the Member States in
respect of exchanging information and further extend and strengthen cooperation.
–                        
European Supervisory Authorities (ESA): the proposal contains several areas where work by the ESA is
envisaged. In particular, EBA, EIOPA and ESMA are asked to carry out an
assessment and provide an opinion on the money laundering and terrorist
financing risks facing the EU. In addition, the greater emphasis on the
risk-based approach requires an enhanced degree of guidance for Member States
and financial institutions on what factors should be taken into account when
applying simplified customer due diligence and enhanced customer due diligence
and when applying a risk-based approach to supervision. In addition, the ESAs
have been tasked with providing regulatory technical standards for certain
issues where financial institutions have to adapt their internal controls to
deal with specific situations.
–                        
Data Protection:
the need to strike a balance between allowing robust systems and controls and
preventative measures against money laundering and terrorist financing on the
one hand, and protecting the rights of data subjects on the other is reflected in
the proposal.
–                        
Transposition measures: Due to the complexity and scope of the proposal, Member States are
required to transmit a correlation table of the provisions of their national
law and the Directive.
European
Economic Area 
The proposal is relevant for the EEA
countries. 
2013/0025 (COD)
Proposal for a
DIRECTIVE OF THE EUROPEAN PARLIAMENT
AND OF THE COUNCIL
on the prevention of the use of the
financial system for the purpose of money laundering and terrorist financing
(Text with EEA relevance)
THE EUROPEAN PARLIAMENT AND THE
COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the
Functioning of the European Union, and in particular Article 114 thereof,
Having regard to the proposal from the
European Commission,
After transmission of the draft legislative
act to the national Parliaments,
Having regard to the opinion of the
European Economic and Social Committee[22],

Having regard to the opinion of the
European Central Bank[23],
After consulting the European Data
Protection Supervisor[24],
Acting in accordance with the ordinary
legislative procedure,
Whereas:
(1)       Massive flows of dirty
money can damage the stability and reputation
of the financial sector and threaten the single market, and terrorism
shakes the very foundations of our society. In addition to the criminal law approach, a preventive effort via the financial system
can produce results. 
(2)       The soundness, integrity and stability of credit and financial institutions
and confidence in the financial system as a whole could be seriously jeopardised by the efforts of criminals and their associates
either to disguise the origin of criminal proceeds or to channel lawful or unlawful money for terrorist purposes. In
order to facilitate their criminal activities, money launderers and terrorist financers could try to take
advantage of the freedom of capital movements and the freedom to supply
financial services which the integrated
financial area entails, if certain coordinating
measures are not adopted at Union level. 
(3)       The current proposal is
the fourth Directive to deal with the threat of money laundering. Council Directive
91/308/EEC of 10 June 1991 on prevention of the use of the financial system for
the purpose of money laundering[25]
defined money laundering in terms of drugs offences and imposed obligations
solely on the financial sector. Directive 2001/97/EC of the European Parliament
and of the Council of December 2001 amending Council Directive 91/308/EEC[26] extended the scope both in
terms of the crimes covered and the range of professions and activities
covered. In June 2003 the Financial Action
Task Force (hereinafter referred to as the FATF) revised its
Recommendations to cover terrorist financing, and provided more detailed
requirements in relation to customer identification and verification, the
situations where a higher risk of money laundering may justify enhanced
measures and also situations where a reduced risk may justify less rigorous
controls. These changes were reflected in Directive 2005/60/EC of the European
Parliament and of the Council of 26 October 2005 on the
prevention of the use of the financial system for the purpose of money
laundering and terrorist financing[27] and Commission
Directive 2006/70/EC of 1 August 2006 laying down implementing measures for
Directive 2005/60/EC of the European Parliament and of the Council as regards
the definition of politically exposed person and the technical criteria for
simplified customer due diligence procedures and for exemption on grounds of a
financial activity conducted on an occasional or very limited basis[28].
(4)       Money laundering and
terrorist financing are frequently carried out in an international context.
Measures adopted solely at national or even European
Union level, without taking account of international coordination and
cooperation, would have very limited effects. The measures adopted by the European Union in this field should
therefore be consistent with other action undertaken
in other international fora. The European
Union action should continue
to take particular account of the Recommendations
of the FATF, which constitutes the foremost international body active in
the fight against money laundering and terrorist financing. With the view to
reinforce the efficacy of the fight against money laundering and terrorist
financing, Directives 2005/60/EC and 2006/70/EC should be aligned with the new FATF
Recommendations adopted and expanded in February 2012.
(5)       Furthermore, the misuse of
the financial system to channel criminal or even clean money to terrorist
purposes poses a clear risk to the integrity, proper functioning, reputation
and stability of the financial system. Accordingly, the preventive measures of
this Directive should cover not only the manipulation of money derived from
crime but also the collection of money or property for terrorist purposes.
(6)       The use of large cash
payments is vulnerable to money laundering and terrorist financing. In order to
increase vigilance and mitigate the risks posed by cash payments natural or
legal persons trading in goods should be covered by this Directive to the
extent that they make or receive cash payments of EUR 7 500 or more. Member
States may decide to adopt stricter provisions including a lower threshold.
(7)       Legal professionals, as
defined by the Member States, should be subject to the provisions of this
Directive when participating in financial or corporate transactions, including
providing tax advice, where there is the greatest risk of the services of those
legal professionals being misused for the purpose of laundering the proceeds of
criminal activity or for the purpose of terrorist financing. There should,
however, be exemptions from any obligation to report information obtained
either before, during or after judicial proceedings, or in the course of
ascertaining the legal position of a client. Thus, legal advice should remain
subject to the obligation of professional secrecy unless the legal counsellor
is taking part in money laundering or terrorist financing, the legal advice is
provided for money laundering or terrorist financing purposes or the lawyer
knows that the client is seeking legal advice for money laundering or terrorist
financing purposes.
(8)       Directly comparable
services should be treated in the same manner when provided by any of the
professionals covered by this Directive. In order to ensure the respect of the
rights guaranteed by the Charter of Fundamental Rights of the European Union,
in the case of auditors, external accountants and tax advisors, who, in some
Member States, may defend or represent a client in the context of judicial
proceedings or ascertain a client's legal position, the information they obtain
in the performance of those tasks should not be subject to the reporting
obligations in accordance with this Directive.
(9)       It is important to expressly
highlight that "tax crimes" related to direct and indirect taxes are
included in the broad definition of "criminal activity" under this
Directive in line with the revised FATF Recommendations. 
(10)     There is a need to identify
any natural person who exercises ownership or control over a legal person. While
finding a percentage shareholding will not automatically result in finding the
beneficial owner, it is an evidential factor to be taken into account. Identification
and verification of beneficial owners should, where relevant, extend to legal
entities that own other legal entities, and should follow the chain of
ownership until the natural person who exercises ownership or control of the
legal person that is the customer is found.
(11)     The need for accurate and
up-to-date information on the beneficial owner is a key factor in tracing
criminals who might otherwise hide their identity behind a corporate structure.
Member States should therefore ensure that companies retain information on
their beneficial ownership and make this information available to competent
authorities and obliged entities. In addition, trustees should declare their
status to obliged entities.
(12)     This Directive should also
apply to those activities of the obliged entities covered by this Directive which
are performed on the internet.
(13)     The use of the gambling
sector to launder the proceeds of criminal activity is of concern. In order to
mitigate the risks related to the sector and to provide parity amongst the
providers of gambling services, an obligation for all providers of gambling
services to conduct customer due diligence for single transactions of EUR 2 000
or more should be laid down. Member States should consider applying this
threshold to the collection of winnings as well as wagering a stake. Providers
of gambling services with physical premises (e.g. casinos and gaming houses)
should ensure that customer due diligence, if it is taken at the point of entry
to the premises, can be linked to the transactions conducted by the customer on
those premises.
(14)     The risk of money
laundering and terrorist financing is not the same in every case. Accordingly,
a risk-based approach should be used. The risk-based approach is not an unduly
permissive option for Member States and obliged entities. It involves the use
of evidence-based decision making to better target the money laundering and
terrorist financing risks facing the European Union and those operating within
it.
(15)     Underpinning the risk-based
approach is a need for Member States to identify, understand and mitigate the
money laundering and terrorist financing risks it faces. The importance of a
supra-national approach to risk identification has been recognised at
international level, and the European Supervisory Authority (European Banking
Authority) (hereinafter ‘EBA’), established by Regulation (EU) No 1093/2010 of
the European Parliament and of the Council of 24 November 2010 establishing a
European Supervisory Authority (European Banking Authority), amending Decision
No 716/2009/EC and repealing Commission Decision 2009/78/EC[29]; the European Supervisory
Authority (European Insurance and Occupational Pensions Authority) (hereinafter
‘EIOPA’), established by Regulation (EU) No 1094/2010 of the European
Parliament and of the Council of 24 November 2010 establishing a European
Supervisory Authority (European Insurance and Occupational Pensions Authority),
amending Decision No 716/2009/EC and repealing Commission Decision 2009/79/EC[30]; and the European Supervisory
Authority (European Securities and Markets Authority) (hereinafter ‘ESMA’),
established by Regulation (EU) No 1095/2010 of the European Parliament and of
the Council of 24 November 2010 establishing a European Supervisory Authority
(European Securities and Markets Authority), amending Decision No 716/2009/EC
and repealing Commission Decision 2009/77/EC[31],
should be tasked with issuing an opinion on the risks affecting the financial
sector.
(16)     The results of risk
assessments at Member State level should, where appropriate, be made available
to obliged entities to enable them to identify, understand and mitigate their
own risks.
(17)     In order to better
understand and mitigate risks at European Union level, Member States should
share the results of their risk assessments with each other, the Commission and
EBA, EIOPA and ESMA, where appropriate.
(18)     When applying the
provisions of this Directive, it is appropriate to take account of the
characteristics and needs of small obliged entities which fall under its scope,
and to ensure a treatment which is appropriate to the specific needs of small
obliged entities, and the nature of the business.
(19)     Risk itself is variable in
nature, and the variables, either on their own or in combination, may increase
or decrease the potential risk posed, thus having an impact on the appropriate
level of preventative measures, such as customer due diligence measures. Thus,
there are circumstances in which enhanced due diligence should be applied and
others in which simplified due diligence may be appropriate.
(20)     It should be recognised
that certain situations present a greater risk of money laundering or terrorist
financing. Although the identity and business profile of all customers should
be established, there are cases where particularly rigorous customer
identification and verification procedures are required.
(21)     This is particularly true
of business relationships with individuals holding, or having held, important
public positions, particularly those from countries where corruption is
widespread. Such relationships may expose the financial sector in particular to
significant reputational and legal risks. The international effort to combat
corruption also justifies the need to pay special attention to such cases and
to apply appropriate enhanced customer due diligence measures in respect of
persons who hold or have held prominent functions domestically or abroad and
senior figures in international organisations.
(22)     Obtaining approval from
senior management for establishing business relationships need not, in all
cases, imply obtaining approval from the board of directors. Granting of such
approval should be possible by someone with sufficient knowledge of the
institution's money laundering and terrorist financing risk exposure and
sufficient seniority to make decisions affecting its risk exposure.
(23)     In order to avoid repeated
customer identification procedures, leading to delays and inefficiency in
business, it is appropriate, subject to suitable safeguards, to allow customers
whose identification has been carried out elsewhere to be introduced to the
obliged entities. Where an obliged entity relies on a third party, the ultimate
responsibility for the customer due diligence procedure remains with the obliged
entity to whom the customer is introduced. The third party, or the person that
has introduced the customer, should also retain his own responsibility for compliance
with the requirements in this Directive, including the requirement to report
suspicious transactions and maintain records, to the extent that he has a
relationship with the customer that is covered by this Directive.
(24)     In the case of agency or
outsourcing relationships on a contractual basis between obliged entities and
external natural or legal persons not covered by this Directive, any anti money
laundering and anti-terrorist financing obligations for those agents or
outsourcing service providers as part of the obliged entities, may only arise
from contract and not from this Directive. The responsibility for complying
with this Directive should remain with the obliged entity covered hereby. 
(25)     All Member States have, or
should, set up financial intelligence units (hereinafter referred to as FIUs)
to collect and analyse the information which they receive with the aim of
establishing links between suspicious transactions and underlying criminal activity
in order to prevent and combat money laundering and terrorist financing. Suspicious
transactions should be reported to the FIUs, which should serve as a national
centre for receiving, analysing and disseminating to the competent authorities
suspicious transaction reports and other information regarding potential money
laundering or terrorist financing. This should not compel Member States to
change their existing reporting systems where the reporting is done through a
public prosecutor or other law enforcement authorities, as long as the
information is forwarded promptly and unfiltered to FIUs, allowing them to perform
their tasks properly, including international cooperation with other FIUs.
(26)     By way of derogation from
the general prohibition on executing suspicious transactions, obliged entities may
execute suspicious transactions before informing the competent authorities,
where refraining from the execution thereof is impossible or likely to
frustrate efforts to pursue the beneficiaries of a suspected money laundering
or terrorist financing operation. This, however, should be without prejudice to
the international obligations accepted by the Member States to freeze without
delay funds or other assets of terrorists, terrorist organisations or those who
finance terrorism, in accordance with the relevant United Nations Security
Council resolutions.
(27)     Member States should have
the possibility to designate an appropriate self-regulatory body of the
professions referred to in Article 2(1)(3)(a),(b), and (d) as the authority to
be informed in the first instance in place of the FIU. In line with the case
law of the European Court of Human Rights, a system of first instance reporting
to a self-regulatory body constitutes an important safeguard to uphold the
protection of fundamental rights as concerns the reporting obligations
applicable to lawyers.
(28)     Where a Member State
decides to make use of the exemptions provided for in Article 33(2), it may
allow or require the self-regulatory body representing the persons referred to
therein not to transmit to the FIU any information obtained from those persons in
the circumstances referred to in that Article. 
(29)     There have been a number of
cases of employees who report their suspicions of money laundering being
subjected to threats or hostile action. Although this Directive cannot
interfere with Member States' judicial procedures, this is a crucial issue for
the effectiveness of the anti-money laundering and anti-terrorist financing
system. Member States should be aware of this problem and should do whatever
they can to protect employees from such threats or hostile action. 
(30)     Directive 95/46/EC of the
European Parliament and of the Council of 24 October 1995 on the protection of
individuals with regard to the processing of personal data and on the free
movement of such data[32],
as implemented in national law, is applicable to the processing of personal
data for the purposes of this Directive. 
(31)     Certain aspects of the
implementation of this Directive involve the collection, analysis, storage and
sharing of data. The processing of personal data should be permitted in order
to comply with the obligations laid down in this Directive, including carrying
out of customer due diligence, ongoing monitoring, investigation and reporting
of unusual and suspicious transactions, identification of the beneficial owner
of a legal person or legal arrangement, sharing of information by competent
authorities and sharing of information by financial institutions. The personal
data collected should be limited to what is strictly necessary for the purpose
of complying with the requirements of this Directive and not further processed
in a way inconsistent with Directive 95/46/EC. In particular, further
processing of personal data for commercial purposes should be strictly
prohibited.
(32)     The fight against
money-laundering and terrorist financing is recognised as an important public
interest ground by all Member States.
(33)     This Directive is without
prejudice to the protection of personal data processed in the framework of
police and judicial cooperation in criminal matters, including the provisions
of Framework decision 977/2008/JHA.
(34)     The rights of access of the
data subject are applicable to the personal data processed for the purpose of
this Directive. However, access by the data subject to information contained in
a suspicious transaction report would seriously undermine the effectiveness of
the fight against money laundering and terrorist financing. Limitations to this
right in accordance with the rules laid down in Article 13 of Directive
95/46/EC may therefore be justified.
(35)     Persons who merely convert
paper documents into electronic data and are acting under a contract with a
credit institution or a financial institution do not fall within the scope of
this Directive, nor does any natural or legal person that provides credit or
financial institutions solely with a message or other support systems for
transmitting funds or with clearing and settlement systems.
(36)     Money laundering and
terrorist financing are international problems and the effort to combat them
should be global. Where Union credit and financial institutions have branches
and subsidiaries located in third countries where the legislation in this area
is deficient, they should, in order to avoid the application of very different
standards within the institution or group of institutions, apply Union
standards or notify the competent authorities of the home Member State if
application of such standards is impossible. 
(37)     Feedback should, where
practicable, be made available to obliged entities on the usefulness and
follow-up of the suspicious transactions reports they present. To make this
possible, and to be able to review the effectiveness of their systems to combat
money laundering and terrorist financing Member States should keep and improve
the relevant statistics. To further enhance the quality and consistency of the
statistical data collected at Union level, the Commission should keep track of
the EU-wide situation with respect to the fight against money laundering and
terrorist financing and publish regular overviews.
(38)     Competent authorities
should ensure that, in regard to currency exchange offices, trust and company
service providers or gambling service providers, the persons who effectively
direct the business of such entities and the beneficial owners of such entities
are fit and proper persons. The criteria for determining whether or not a
person is fit and proper should, as a minimum, reflect the need to protect such
entities from being misused by their managers or beneficial owners for criminal
purposes.
(39)     Taking into account the
transnational character of money laundering and terrorist financing,
co-ordination and co-operation between EU FIUs are extremely important. This
co-operation has so far only been addressed by Council Decision 2000/642/JHA of
17 October 2000 concerning arrangements for cooperation between financial
intelligence units of the Member States in respect of exchanging information[33]. In order to ensure better
co-ordination and cooperation between FUIs, and in particular to ensure that
suspicious transactions reports reach the FIU of the Member State where the
report would be of most use, more detailed, further going and up-dated rules should
be included in this Directive.
(40)     Improving the exchange of
information between FIUs within the EU is of particular importance to face the
transnational character of money laundering and terrorist financing. The use of
secure facilities for the exchange of information, especially the decentralised
computer network FIU.net and the techniques offered by that network should be
encouraged by Member States.
(41)     The importance of combating
money laundering and terrorist financing should lead Member States to lay down
effective, proportionate and dissuasive sanctions in national law for failure
to respect the national provisions adopted pursuant to this Directive. Member
States currently have a diverse range of administrative measures and sanctions for
breaches of the key preventative measures. This diversity could be detrimental
to the efforts put in combating money laundering and terrorist financing and
the Union's response is at risk of being fragmented. This Directive should
therefore include a range of administrative measures and sanctions that Member
States shall have available for systematic breaches of the requirements
relating to customer due diligence measures, record keeping, reporting of suspicious
transactions and internal controls of obliged entities. This range should be
sufficiently broad to allow Member States and competent authorities to take
account of the differences between obliged entities, in particular between
financial institutions and other obliged entities, as regards their size, characteristics
and areas of activity. In the application of this Directive, Member States
should ensure that the imposition of administrative measures and sanctions in
accordance with this Directive and of criminal sanctions in accordance with
national law does not breach the principle of ne bis in idem.
(42)     Technical standards in
financial services should ensure consistent harmonisation and adequate
protection of depositors, investors and consumers across the Union. As bodies
with highly specialised expertise, it would be efficient and appropriate to
entrust EBA, EIOPA and ESMA with the elaboration of draft regulatory technical
standards which do not involve policy choices, for submission to the
Commission. 
(43)     The Commission should adopt
the draft regulatory technical standards developed by EBA, EIOPA and ESMA pursuant
to Article 42 of this Directive by means of delegated acts pursuant to Article
290 of the Treaty on the Functioning of the European Union and in accordance
with Articles 10 to 14 of Regulation (EU) No 1093/2010, Regulation (EU) No
1094/2010 and Regulation (EU) No 1095/2010. 
(44)     In view of the very
substantial amendments that would need to be made to Directive 2005/60/EC and
Directive 2006/70/EC, they should be merged and replaced for reasons of clarity
and consistency.
(45)     Since the objective of this
Directive, namely the protection
of the financial system by means of prevention, investigation and detection of money
laundering and terrorist financing, cannot be sufficiently achieved by the
Member States, as individual measures adopted by Member States to protect their
financial systems could be inconsistent with the functioning of the internal
market and with the prescriptions of the rule of law and Union public policy
and can therefore, by reason of the scale and effects of the action, be better
achieved at Union level, the Union may adopt measures, in accordance with the
principle of subsidiarity as set out in Article 5 of the Treaty on European
Union. In accordance with the principle of proportionality, as set out in that
Article, this Directive does not go beyond what is necessary in order to
achieve that objective.
(46)     This Directive respects the
fundamental rights and observes the principles recognised by the Charter of
Fundamental Rights of the European Union, in particular, the respect for
private and family life, the right to protection of personal data, the freedom
to conduct a business, the prohibition of discrimination, the right to an
effective remedy and to a fair trial, and the right of defence.
(47)     In line with Article 21 of
the EU Charter of Fundamental Rights prohibiting any discrimination based on
any ground, Member States have to ensure that this Directive is implemented, as
regards risk assessments in the context of customer due diligence, without
discrimination.
(48)     In accordance with the
Joint Political Declaration of Member States and the Commission of 28 September
2011 on explanatory documents, Member States have undertaken to accompany, in
justified cases, the notification of their transposition measures with one or
more documents explaining the relationship between the components of a
directive and the corresponding parts of national transposition instruments.
With regard to this Directive, the legislator considers the transmission of
such documents to be justified,
HAVE ADOPTED THIS DIRECTIVE:
CHAPTER I
GENERAL PROVISIONS
Section 1
scope and definitions
Article 1
1.           Member States shall ensure
that money laundering and terrorist financing are prohibited.
2.           For the purposes of this
Directive, the following conduct, when committed intentionally, shall be
regarded as money laundering:
(a)         
the conversion or transfer of property, knowing
that such property is derived from criminal activity or from an act of
participation in such activity, for the purpose of concealing or disguising the
illicit origin of the property or of assisting any person who is involved in
the commission of such activity to evade the legal consequences of his action;
(b)         
the concealment or disguise of the true nature,
source, location, disposition, movement, rights with respect to, or ownership
of property, knowing that such property is derived from criminal activity or
from an act of participation in such activity;
(c)         
the acquisition, possession or use of property,
knowing, at the time of receipt, that such property was derived from criminal
activity or from an act of participation in such activity;
(d)         
participation in, association to commit,
attempts to commit and aiding, abetting, facilitating and counselling the
commission of any of the actions referred to in points (a), (b) and (c).
3.           Money laundering shall be
regarded as such even where the activities which generated the property to be
laundered were carried out in the territory of another Member State or in that of a third country.
4.           For the purposes of this
Directive, ‘terrorist financing’ means the provision or collection of funds, by
any means, directly or indirectly, with the intention that they should be used
or in the knowledge that they are to be used, in full or in part, in order to
carry out any of the offences within the meaning of Articles 1 to 4 of Council
Framework Decision 2002/475/JHA of 13 June 2002 on combating terrorism[34], as amended by Council
Framework Decision 2008/919/JHA of 28 November 2008[35].
5.           Knowledge, intent or
purpose required as an element of the activities referred to in paragraphs 2
and 4 may be inferred from objective factual circumstances.
Article 2
1.           This Directive shall apply
to the following obliged entities:
(1)         
credit institutions;
(2)         
financial institutions;
(3)         
the following legal or natural persons acting in
the exercise of their professional activities:
(a)          
auditors, external accountants and tax advisors;
(b)         
notaries and other independent legal
professionals, when they participate, whether by acting on behalf of and for
their client in any financial or real estate transaction, or by assisting in
the planning or execution of transactions for their client concerning the:
(i)      buying and selling of real property
or business entities;
(ii)      managing of client money, securities
or other assets;
(iii)     opening or management of bank,
savings or securities accounts;
(iv)     organisation of contributions
necessary for the creation, operation or management of companies;
(v)     creation, operation or management of
trusts, companies or similar structures;
(c)          
trust or company service providers not already
covered under points (a) or (b);
(d)         
real estate agents, including letting agents;
(e)          
other natural or legal persons trading in goods,
only to the extent that payments are made or received in cash in an amount of
EUR 7 500 or more, whether the transaction is executed in a single operation or
in several operations which appear to be linked;
(f)           
providers of gambling services.
2.           Member States may decide
that legal and natural persons, who engage in a financial activity on an
occasional or very limited basis where there is little risk of money laundering
or terrorist financing occurring, do not fall within the scope of this
Directive provided that the legal or natural person fulfils all of the
following criteria:
(a)         
the financial activity is limited in absolute
terms;
(b)         
the financial activity is limited on a
transaction basis;
(c)         
the financial activity is not the main activity;
(d)         
the financial activity is ancillary and directly
related to the main activity;
(e)         
the main activity is not an activity mentioned
in paragraph 1, with the exception of the activity referred to in point (3)(e)
of paragraph 1;
(f)           
the financial activity is provided only to the
customers of the main activity and is not generally offered to the public.
The previous subparagraph shall not apply to
the legal and natural persons engaged in the activity of money remittance
within the meaning of Article 4(13) of Directive 2007/64/EC of the European
Parliament and of the Council of 13 November 2007 on payment services in the
internal market amending Directives 97/7/EC, 2002/65/EC, 2005/60/EC and
2006/48/EC and repealing Directive 97/5/EC[36].
3.           For the purposes of point
(a) of paragraph 2, Member States shall require that the total turnover of the
financial activity may not exceed a threshold which must be sufficiently low.
That threshold shall be established at national level, depending on the type of
financial activity.
4.           For the purposes of point
(b) of paragraph 2, Member States shall apply a maximum threshold per customer
and single transaction, whether the transaction is carried out in a single
operation or in several operations which appear to be linked. That threshold
shall be established at national level, depending on the type of financial
activity. It shall be sufficiently low in order to ensure that the types of
transactions in question are an impractical and inefficient method for
laundering money or for terrorist financing, and shall not exceed EUR 1 000.
5.           For the purposes of point
(c) of paragraph 2, Member States shall require that the turnover of the
financial activity does not exceed 5 % of the total turnover of the legal or
natural person concerned.
6.           In assessing the risk of
money laundering or terrorist financing occurring for the purposes of this
Article, Member States shall pay special attention to any financial activity
which is regarded as particularly likely, by its nature, to be used or abused
for money laundering or terrorist financing purposes.
7.           Any decision pursuant to
this Article shall state the reasons on which it is based. Member States shall
provide for the possibility of withdrawing that decision should circumstances
change.
8.           Member States shall
establish risk-based monitoring activities or take any other adequate measures
to ensure that the exemption granted by decisions pursuant to this Article is
not abused.
Article 3
For the purposes of this Directive the
following definitions shall apply:
(1)                   
"credit institution" means a credit
institution, as defined in Article 4(1) of Directive 2006/48/EC of the European
Parliament and of the Council of 14 June 2006 relating to the taking up and
pursuit of the business of credit institutions[37],
including branches within the meaning of Article 4(3) of that Directive located
in the European Union of credit institutions having their head offices inside
or outside the European Union;
(2)                   
"financial institution" means: 
(a)         
an undertaking, other than a credit institution,
which carries out one or more of the operations included in points 2 to 12 and
points 14 and 15 of Annex I to Directive 2006/48/EC, including the activities
of currency exchange offices (bureaux de change); 
(b)         
an insurance company duly authorised in
accordance with Directive 2002/83/EC of the European Parliament and of the
Council of 5 November 2002 concerning life assurance[38], insofar as it carries out
activities covered by that Directive; 
(c)         
an investment firm as defined in point 1 of
Article 4(1) of Directive 2004/39/EC of the European Parliament and of the Council
of 21 April 2004 on markets in financial instruments[39];
(d)         
a collective investment undertaking marketing
its units or shares;
(e)         
an insurance intermediary as defined in Article
2(5) of Directive 2002/92/EC of the European Parliament and of the Council of 9
December 2002 on insurance mediation[40],
with the exception of intermediaries as mentioned in Article 2(7) of that
Directive, when they act in respect of life insurance and other investment
related services;
(f)           
branches, when located in the European Union, of
financial institutions as referred to in points (a) to (e), whose head offices
are inside or outside the European Union;
(3)                   
"property" means assets of every kind,
whether corporeal or incorporeal, movable or immovable, tangible or intangible,
and legal documents or instruments in any form including electronic or digital,
evidencing title to or an interest in such assets;
(4)                   
"criminal activity" means any kind of
criminal involvement in the commission of the following serious crimes:
(a)         
acts as defined in Articles 1 to 4 of Framework
Decision 2002/475/JHA on combatting terrorism, as amended by Council Framework
Decision 2008/919/JHA of 28 November 2008;
(b)         
any of the offences referred in Article 3(1)(a)
of the 1988 United Nations Convention against Illicit Traffic in Narcotic Drugs
and Psychotropic Substances;
(c)         
the activities of criminal organisations as
defined in Article 1 of Council Joint Action 98/733/JHA of 21 December 1998 on
making it a criminal offence to participate in a criminal organisation in the
Member States of the European Union[41];
(d)         
fraud affecting the Union's financial interests,
at least serious, as defined in Article 1(1) and Article 2 of the Convention on
the Protection of the European Communities' Financial Interests[42];
(e)         
corruption;
(f)           
all offences, including tax crimes related to
direct taxes and indirect taxes, which are punishable by deprivation of liberty
or a detention order for a maximum of more than one year or, as regards those
States which have a minimum threshold for offences in their legal system, all
offences punishable by deprivation of liberty or a detention order for a
minimum of more than six months;
(5)                   
"beneficial owner" means any natural
person(s) who ultimately owns or controls the customer and/or the natural
person on whose behalf a transaction or activity is being conducted. The
beneficial owner shall at least include:
(a)         
in the case of corporate entities:
(i)      the natural person(s) who ultimately
owns or controls a legal entity through direct or indirect ownership or control
over a sufficient percentage of the shares or voting rights in that legal
entity, including through bearer share holdings, other than a company listed on
a regulated market that is subject to disclosure requirements consistent with
European Union legislation or subject to equivalent international standards.
A percentage of 25% plus one share shall be
evidence of ownership or control through shareholding and applies to every
level of direct and indirect ownership;
(ii)      if there is any doubt that the
person(s) identified in point (i) are the beneficial owner(s), the natural
person(s) who exercises control over the management of a legal entity through
other means;
(b)         
in the case of legal entities, such as
foundations, and legal arrangements, such as trusts, which administer and
distribute funds:
(i)      the natural person(s) who exercises
control over 25 % or more of the property of a legal arrangement or entity; and
(ii)      where the future beneficiaries have
already been determined, the natural person(s) who is the beneficiary of 25 %
or more of the property of a legal arrangement or entity; or
(iii)     where the individuals that benefit
from the legal arrangement or entity have yet to be determined, the class of
persons in whose main interest the legal arrangement or entity is set up or
operates. For beneficiaries of trusts that are designated by characteristics or
by class, obliged entities shall obtain sufficient information concerning the
beneficiary to satisfy itself that it will be able to establish the identity of
the beneficiary at the time of the payout or when the beneficiary intends to
exercise vested rights;
(6)                   
"trust or company service providers"
means any natural or legal person which by way of business provides any of the
following services to third parties:
(a)         
forming companies or other legal persons;
(b)         
acting as or arranging for another person to act
as a director or secretary of a company, a partner of a partnership, or a
similar position in relation to other legal persons;
(c)         
providing a registered office, business address,
correspondence or administrative address and other related services for a
company, a partnership or any other legal person or arrangement;
(d)         
acting as or arranging for another person to act
as a trustee of an express trust or a similar legal arrangement;
(e)         
acting as or arranging for another person to act
as a nominee shareholder for another person other than a company listed on a
regulated market that is subject to disclosure requirements in conformity with
European Union legislation or subject to equivalent international standards;
(7)          (a)     "foreign
politically exposed persons" means natural persons who are or have been
entrusted with prominent public functions by a third country;
(b)         
"domestic politically exposed persons"
means natural persons who are or who have been entrusted by a Member State with prominent public functions;
(c)         
"persons who are or who have been entrusted
with a prominent function by an international organisation" means
directors, deputy directors and members of the board or equivalent function of
an international organisation;
(d)         
"natural persons who are or have been
entrusted with prominent public functions" shall include the following:
(i)      heads of State, heads of government,
ministers and deputy or assistant ministers;
(ii)      members of parliaments;
(iii)     members of supreme courts, of
constitutional courts or of other high-level judicial bodies whose decisions
are not subject to further appeal, except in exceptional circumstances;
(iv)     members of courts of auditors or of
the boards of central banks;
(v)     ambassadors, chargés d'affaires
and high-ranking officers in the armed forces;
(vi)     members of the administrative,
management or supervisory bodies of State owned enterprises.
         None of the categories set out in
points (i) to (vi) shall be understood as covering middle ranking or more
junior officials;
(e)         
"family members" shall include the
following:
(i)      the spouse;
(ii)      any partner considered as equivalent
to the spouse;
(iii)     the children and their spouses or
partners;
(iv)     the parents;
(f)           
"persons known to be close associates"
shall include the following:
(i)      any natural person who is known to
have joint beneficial ownership of legal entities or legal arrangements, or any
other close business relations, with a person referred to in points (7)(a) to
(7)(d) above;
(ii)      any natural person who has sole
beneficial ownership of a legal entity or legal arrangement which is known to
have been set up for the benefit de facto of the person referred to in points
(7)(a) to (7)(d) above;
(8)                   
"senior management" means an officer
or employee with sufficient knowledge of the institution's money laundering and
terrorist financing risk exposure and sufficient seniority to make decisions
affecting its risk exposure. It need not, in all cases, involve a member of the
board of directors;
(9)                   
"business relationship" means a
business, professional or commercial relationship which is connected with the professional
activities of the obliged entities and which is expected, at the time when the
contact is established, to have an element of duration;
(10)               
"gambling services" means any service
which involves wagering a stake with monetary value in games of chance
including those with an element of skill such as lotteries, casino games, poker
games and betting transactions that are provided at a physical location, or by
any means at a distance, by electronic means or any other technology for
facilitating communication, and at the individual request of a recipient of
services;
(11)               
"group" has the meaning given to it in
Article 2(12) of Directive 2002/87/EC of the European Parliament and of the
Council of 16 December 2002 on the supplementary supervision of credit
institutions, insurance undertakings and investment firms in a financial
conglomerate[43].

Article 4
1.           Member States shall ensure
that the provisions of this Directive are extended in whole or in part to
professions and to categories of undertakings, other than the obliged entities
referred to in Article 2(1), which engage in activities which are particularly
likely to be used for money laundering or terrorist financing purposes.
2.           Where a Member State decides to extend the provisions of this Directive to professions and to
categories of undertakings other than those referred to in Article 2(1), it
shall inform the Commission thereof.
Article 5
The Member States may adopt or retain in
force stricter provisions in the field covered by this Directive to prevent
money laundering and terrorist financing.
Section 2
Risk assessment
Article 6
1.           The European Banking
Authority (hereinafter "EBA"), European Insurance and Occupational
Pensions Authority (hereinafter "EIOPA") and European Securities and
Markets Authority (hereinafter "ESMA") shall provide a joint opinion
on the money laundering and terrorist financing risks affecting the internal market.

The opinion shall be provided within 2 years from
the date of entry into force of this Directive.
2.           The Commission shall make
the opinion available to assist Member States and obliged entities to identify,
manage and mitigate the risk of money laundering and terrorist financing.
Article 7
1.           Each Member State shall take appropriate steps to identify, assess, understand and mitigate the money
laundering and terrorist financing risks affecting it, and keep the assessment
up-to-date. 
2.           Each Member State shall designate an authority to co-ordinate the national response to the risks referred
to in paragraph 1. The identity of that authority shall be notified to the
Commission, EBA, EIOPA and ESMA and other Member States.
3.           In carrying out the assessments
referred to in paragraph 1, Member States may make use of the opinion referred
to in Article 6(1).
4.           Each Member State shall carry out the assessment referred to in paragraph 1 and:
(a)         
use the assessment(s) to improve its anti-money
laundering and combating terrorist financing regime, in particular by
identifying any areas where obliged entities shall apply enhanced measures and,
where appropriate, specifying the measures to be taken;
(b)         
use the assessment(s) to assist it in the
allocation and prioritisation of resources to combat money laundering and
terrorist financing;
(c)         
make appropriate information available to obliged
entities to carry out their own money laundering and terrorist financing risk
assessments.
5.           Member States shall make
the results of their risk assessments available to the other Member States, the Commission, and EBA, EIOPA and ESMA upon request.
Article 8
1.           Member States shall ensure
that obliged entities take appropriate steps to identify and assess their money
laundering and terrorist financing risks taking into account risk factors including
customers, countries or geographic areas, products, services, transactions or
delivery channels. These steps shall be proportionate to the nature and size of
the obliged entities.
2.           The assessments referred
to in paragraph 1 shall be documented, kept up to date and be made available to
competent authorities and self-regulatory bodies. 
3.           Member States shall ensure
that obliged entities have policies, controls and procedures to mitigate and
manage effectively the money laundering and terrorist financing risks
identified at Union level, Member State level, and at the level of obliged
entities. Policies, controls and procedures should be proportionate to the
nature and size of those obliged entities.
4.           The policies and
procedures referred to in paragraph 3 shall at least include:
(a)         
the development of internal policies, procedures
and controls, including customer due diligence, reporting, record keeping,
internal control, compliance management (including, when appropriate to the
size and nature of the business, the appointment of a compliance officer at
management level) and employee screening;
(b)         
when appropriate with regard to the size and
nature of the business, an independent audit function to test internal
policies, procedures and controls referred to in point (a).
5.           Member States shall
require obliged entities to obtain approval from senior management for the
policies and procedures they put in place, and shall monitor and enhance the
measures taken, where appropriate.
CHAPTER II
CUSTOMER DUE DILIGENCE
Section 1
General provisions
Article 9
Member States shall prohibit their credit
and financial institutions from keeping anonymous accounts or anonymous
passbooks. Member States shall in all cases require that the owners and
beneficiaries of existing anonymous accounts or anonymous passbooks be made the
subject of customer due diligence measures as soon as possible and in any event
before such accounts or passbooks are used in any way.
Article 10
Member States shall ensure that obliged
entities apply customer due diligence measures in the following cases:
(a)                   
when establishing a business relationship;
(b)                   
when carrying out occasional transactions
amounting to EUR 15 000 or more, whether the transaction is carried out in a
single operation or in several operations which appear to be linked;
(c)                   
for natural or legal persons trading in goods,
when carrying out occasional transactions in cash amounting to EUR 7 500 or
more, whether the transaction is carried out in a single operation or in
several operations which appear to be linked;
(d)                   
for providers of gambling services, when
carrying out occasional transactions amounting to EUR 2 000 or more, whether
the transaction is carried out in a single operation or in several operations
which appear to be linked; 
(e)                   
when there is a suspicion of money laundering or
terrorist financing, regardless of any derogation, exemption or threshold;
(f)                     
when there are doubts about the veracity or
adequacy of previously obtained customer identification data.
Article 11
1.           Customer due diligence measures
shall comprise:
(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;
(b)         
identifying the beneficial owner and taking
reasonable measures to verify his identity so that the institution or person
covered by this Directive is satisfied that it knows who the beneficial owner
is, including, as regards legal persons, trusts and similar legal arrangements,
taking reasonable measures to understand the ownership and control structure of
the customer;
(c)         
assessing and, as appropriate, obtaining
information on the purpose and intended nature of the business relationship;
(d)         
conducting ongoing monitoring of the business
relationship including scrutiny of transactions undertaken throughout the
course of that relationship to ensure that the transactions being conducted are
consistent with the institution's or person's knowledge of the customer, the
business and risk profile, including, where necessary, the source of funds and
ensuring that the documents, data or information held are kept up-to-date.
2.           Member States shall ensure
that obliged entities apply each of the customer due diligence requirements set
out in paragraph 1, but may determine the extent of such measures on a
risk-sensitive basis.
3.           When assessing money
laundering and terrorist financing risks, Member States shall require obliged
entities to take into account at least the variables set out in Annex I.
4.           Member States shall ensure
that obliged entities are able to demonstrate to competent authorities or
self-regulatory bodies that the measures are appropriate in view of the risks
of money laundering and terrorist financing that have been identified.
5.           For life or other
investment-related insurance business, Member States shall ensure that financial
institutions shall, in addition to the customer due diligence measures required
for the customer and the beneficial owner, conduct the following customer due
diligence measures on the beneficiaries of life insurance and other investment
related insurance policies, as soon as the beneficiaries are identified or designated:
(a)         
for beneficiaries that are identified as specifically
named natural or legal persons or legal arrangements, taking the name of the
person;
(b)         
for beneficiaries that are designated by
characteristics or by class or by other means, obtaining sufficient information
concerning those beneficiaries to satisfy the financial institution that it
will be able to establish the identity of the beneficiary at the time of the
payout.
For both the cases referred to in points (a)
and (b), the verification of the identity of the beneficiaries shall occur at
the time of the payout. In case of assignment, in whole or in part, of the life
or other investment related insurance to a third party, financial institutions
aware of the assignment shall identify the beneficial owner at the time of the
assignment to the natural or legal person or legal arrangement receiving for
own benefit the value of the policy assigned.
Article 12
1.           Member States shall
require that the verification of the identity of the customer and the
beneficial owner takes place before the establishment of a business
relationship or the carrying-out of the transaction.
2.           By way of derogation from
paragraph 1, Member States may allow the verification of the identity of the
customer and the beneficial owner to be completed during the establishment of a
business relationship if this is necessary not to interrupt the normal conduct
of business and where there is little risk of money laundering or terrorist
financing occurring. In such situations these procedures shall be completed as
soon as practicable after the initial contact.
3.           By way of derogation from
paragraphs 1 and 2, Member States may allow the opening of a bank account
provided that there are adequate safeguards in place to ensure that
transactions are not carried out by the customer or on its behalf until full
compliance with paragraphs 1 and 2 is obtained.
4.           Member States shall
require that, where the institution or person concerned is unable to comply
with points (a), (b) and (c) of Article 11(1), it shall not carry out a
transaction through a bank account, establish a business relationship or carry
out the transaction, and shall consider terminating the business relationship
and making a suspicious transaction report to the financial intelligence unit
(FIU) in accordance with Article 32 in relation to the customer.
Member States shall not apply the previous subparagraph
to, notaries, other independent legal professionals, auditors, external
accountants and tax advisors only to the strict extent that such exemption
relates to ascertaining the legal position for their client or performing their
task of defending or representing that client in, or concerning judicial
proceedings, including advice on instituting or avoiding proceedings.
5.           Member States shall
require that obliged entities apply the customer due diligence procedures not
only to all new customers but also at appropriate times to existing customers
on a risk-sensitive basis, including at times when the relevant circumstances
of a customer change.
Section 2
Simplified customer due diligence
Article 13
1.           Where a Member State or an obliged entity identifies areas of lower risk, that Member State may allow obliged entities to apply simplified customer due diligence measures.
2.           Before applying simplified
customer due diligence measures obliged entities shall ascertain that the customer
relationship or transaction presents a lower degree of risk. 
3.           Member States shall ensure
that obliged entities carry out sufficient monitoring of the transaction or
business relationship to enable the detection of unusual or suspicious
transactions.
Article 14
When assessing the money laundering and
terrorist financing risks relating to types of customers, countries or
geographic areas, and particular products, services, transactions or delivery
channels, Member States and obliged entities shall take
into account at least the factors of potentially lower risk situations set out
in Annex II.
Article 15
EBA, EIOPA and ESMA shall issue guidelines
addressed to competent authorities and the obliged entities referred to in Article
2(1)(1) and (2) in accordance with Article 16 of Regulation (EU) No 1093/2010,
of Regulation (EU) No 1094/2010, and of Regulation (EU) No 1095/2010, on the
risk factors to be taken into consideration and/or the measures to be taken in
situations where simplified due diligence measures are appropriate. Specific
account should be taken of the nature and size of the business, and where
appropriate and proportionate, specific measures should be foreseen. These
guidelines shall be issued within 2 years of the date of entry into force of
this Directive.
Section 3
Enhanced customer due diligence
Article 16
1.           In cases identified in Articles
17 to 23 of this Directive and in other cases of higher risks that are
identified by Member States or obliged entities, Member States shall require obliged
entities to apply enhanced customer due diligence measures to manage and
mitigate those risks appropriately.
2.           Member States shall
require obliged entities to examine, as far as reasonably possible, the
background and purpose of all complex, unusual large transactions, and all
unusual patterns of transactions, which have no apparent economic or lawful
purpose. In particular, they shall increase the degree and nature of monitoring
of the business relationship, in order to determine whether those transactions
or activities appear unusual or suspicious.
3.           When assessing the money
laundering and terrorist financing risks, Member States and obliged entities shall
take into account at least the factors of potentially higher-risk situations
set out in Annex III.
4.           EBA, EIOPA and ESMA shall
issue guidelines addressed to competent authorities and the obliged entities
referred to Article 2(1)(1) and (2) in accordance with Article 16 of Regulation
(EU) No 1093/2010, of Regulation (EU) No 1094/2010, and of Regulation (EU) No
1095/2010 on the risk factors to be taken into consideration and/or the
measures to be taken in situations where enhanced due diligence measures need
to be applied. Those guidelines shall be issued within 2 years of the date of entry
into force of this Directive.
Article 17
In respect of cross-frontier correspondent
banking relationships with respondent institutions from third countries, Member
States shall, in addition to the customer due diligence measures as set out in
Article 11, require their credit institutions to:
(a)                   
gather sufficient information about a respondent
institution to understand fully the nature of the respondent's business and to
determine from publicly available information the reputation of the institution
and the quality of supervision;
(b)                   
assess the respondent institution's anti-money
laundering and anti-terrorist financing controls;
(c)                   
obtain approval from senior management before
establishing new correspondent banking relationships;
(d)                   
document the respective responsibilities of each
institution;
(e)                   
with respect to payable-through accounts, be
satisfied that the respondent credit institution has verified the identity of
and performed ongoing due diligence on the customers having direct access to
accounts of the correspondent and that it is able to provide relevant customer
due diligence data to the correspondent institution, upon request.
Article 18
In respect of transactions or business
relationships with foreign politically exposed persons, Member States shall, in
addition to the customer due diligence measures set out in Article 11, require obliged
entities to:
(a)                   
have appropriate risk-based procedures to
determine whether the customer or the beneficial owner of the customer is such a
person;
(b)                   
obtain senior management approval for
establishing or continuing business relationships with such customers;
(c)                   
take adequate measures to establish the source
of wealth and source of funds that are involved in the business relationship or
transaction;
(d)                   
conduct enhanced ongoing monitoring of the
business relationship.
Article 19
In respect of transactions or business relationships
with domestic politically exposed persons or a person who is or has been
entrusted with a prominent function by an international organisation, Member
States shall, in addition to the customer due diligence measures set out in
Article 11, require obliged entities:
(a)                   
to have appropriate risk-based procedures to determine
whether the customer or the beneficial owner of the customer is such a person;
(b)                   
in cases of higher risk business relationships with
such persons, to apply the measures referred to in points (b), (c) and (d) of
Article 18.
Article 20
Obliged entities shall take reasonable
measures to determine whether the beneficiaries of a life or other investment
related insurance policy and/or, where required, the beneficial owner of the
beneficiary are politically exposed persons. Those measures shall be taken at
the latest at the time of the payout or at the time of the assignment, in whole
or in part, of the policy. Where there are higher risks identified, in addition
to taking normal customer due diligence measures, Member States shall require obliged
entities to:
(a)                   
inform senior management before the payout of
the policy proceeds;
(b)                   
conduct enhanced scrutiny on the whole business
relationship with the policyholder.
Article 21
The measures referred to in Articles 18, 19
and 20 shall also apply to family members or persons known to be close
associates of such politically exposed persons.
Article 22
Where a person referred to in Articles 18, 19
and 20 has ceased to be entrusted with a prominent public function by a Member
State or a third country or with a prominent function by an international
organisation, obliged entities shall be required to consider the continuing
risk posed by that person and to apply such appropriate and risk-sensitive
measures until such time as that person is deemed to pose no further risk. This
period of time shall not be less than 18 months.
Article 23
1.           Member States shall
prohibit credit institutions from entering into or continuing a correspondent
banking relationship with a shell bank and shall require that credit
institutions take appropriate measures to ensure that they do not engage in or
continue correspondent banking relationships with a bank that is known to
permit its accounts to be used by a shell bank.
2.           For the purposes of
paragraph 1, "shell bank" shall mean a credit institution, or an
institution engaged in equivalent activities, incorporated in a jurisdiction in
which it has no physical presence, involving meaningful mind and management,
and which is unaffiliated with a regulated financial group.
Section 4
Performance by third parties
Article 24
Member States may permit the obliged
entities to rely on third parties to meet the requirements laid down in Article
11(1)(a), (b) and (c). However, the ultimate responsibility for meeting those
requirements shall remain with the obliged entity which relies on the third
party.
Article 25
1.           For the purposes of this
Section, "third parties" shall mean obliged entities who are listed
in Article 2, or other institutions and persons situated in Member States or a
third country, who apply customer due diligence requirements and record keeping
requirements equivalent to those laid down in this Directive and their
compliance with the requirements of this Directive is supervised in accordance
with Section 2 of Chapter VI.
2.           The Member States shall
consider information available on the level of geographical risk when deciding
if a third country meets the conditions laid down in paragraph 1 and shall
inform each other, the Commission and EBA, EIOPA and ESMA to the extent
relevant for the purposes of this Directive and in accordance with the relevant
provisions of Regulation (EU) No 1093/2010, of Regulation (EU) No 1094/2010,
and of Regulation (EU) No 1095/2010, of cases where they consider that a third
country meets such conditions.
Article 26
1.           Member States shall ensure
that obliged entities obtain from the third party being relied upon the
necessary information concerning the requirements laid down in Article 11(1)(a),
(b) and (c).
2.           Member States shall ensure
that obliged entities to which the customer is being referred take adequate
steps to ensure that relevant copies of identification and verification data
and other relevant documentation on the identity of the customer or the beneficial
owner are immediately forwarded, on request, by the third party.
Article 27
Member States shall ensure that the home
competent authority (for group-wide policies and controls) and the host
competent authority (for branches and subsidiaries) may consider that an
obliged entity applies the measures contained in Article 25(1) and 26 through
its group programme, where the following conditions are fulfilled:
(a)                   
an obliged entity relies on information provided
by a third party that is part of the same group;
(b)                   
that group applies customer due diligence
measures, rules on record keeping and programmes against money laundering and
terrorist financing in accordance with this Directive or equivalent rules;
(c)                   
the effective implementation of requirements
referred to in point (b) is supervised at group level by a competent authority.
Article 28
This Section shall not apply to outsourcing
or agency relationships where, on the basis of a contractual arrangement, the
outsourcing service provider or agent is to be regarded as part of the obliged
entity.
CHAPTER III
BENEFICIAL OWNERSHIP INFORMATION
Article 29
1.           Member States shall ensure
that corporate or legal entities established within their territory obtain and
hold adequate, accurate and current information on their beneficial ownership.
2.           Member States shall ensure
that the information referred to in paragraph 1 of this Article can be accessed
in a timely manner by competent authorities and by obliged entities.
Article 30
1.           Member States shall ensure
that trustees of any express trust governed under their law obtain and hold
adequate, accurate and current information on beneficial ownership regarding
the trust. This information shall include the identity of the settlor, of the
trustee(s), of the protector (if relevant), of the beneficiaries or class of
beneficiaries, and of any other natural person exercising effective control
over the trust.
2.           Member States shall ensure
that trustees disclose their status to obliged entities when, as a trustee, the
trustee forms a business relationship or carries out an occasional transaction
above the threshold set out in points (b), (c) and (d) of Article 10.
3.           Member States shall ensure
that the information referred to in paragraph 1 of this Article can be accessed
in a timely manner by competent authorities and by obliged entities.
4.           Member States shall ensure
that measures corresponding to those in paragraphs 1, 2 and 3 apply to other
types of legal entity and arrangement with a similar structure and function to
trusts.
CHAPTER IV
REPORTING OBLIGATIONS
Section 1
General provisions
Article 31
1.           Each Member State shall
establish an FIU in order to prevent, detect and investigate money laundering
and terrorist financing.
2.           Member States shall notify
the Commission in writing of the name and address of the respective FIUs.
3.           The FIU shall be
established as a central national unit. It shall be responsible for receiving
(and to the extent permitted, requesting), analysing and disseminating to the
competent authorities, disclosures of information which concern potential money
laundering or associated predicate offences, potential terrorist financing or
are required by national legislation or regulation. The FIU shall be provided
with adequate resources in order to fulfil its tasks.
4.           Member States shall ensure
that the FIU has access, directly or indirectly, on a timely basis, to the
financial, administrative and law enforcement information that it requires to
properly fulfil its tasks. In addition, FIUs shall respond to requests for information
by law enforcement authorities in their Member State unless there are factual
reasons to assume that the provision of such information would have a negative
impact on ongoing investigations or analyses, or, in exceptional circumstances,
where divulgation of the information would be clearly disproportionate to the
legitimate interests of a natural or legal person or irrelevant with regard to
the purposes for which it has been requested.
5.           Member States shall ensure
that the FIU is empowered to take urgent action, either directly or indirectly,
when there is a suspicion that a transaction is related to money laundering or
terrorist financing, to suspend or withhold consent to a transaction going
ahead in order to analyse the transaction and confirm the suspicion.
6.           The FIU’s analysis
function shall consist of an operational analysis which focusses on individual
cases and specific targets and a strategic analysis addressing money laundering
and terrorist financing trends and patterns.
Article 32
1.           Member States shall
require obliged entities, and where applicable their directors and employees,
to cooperate fully:
(a)         
by promptly informing the FIU, on their own
initiative, where the institution or person covered by this Directive knows,
suspects or has reasonable grounds to suspect that funds are the proceeds of
criminal activity or are related to terrorist financing and by promptly
responding to requests by the FIU for additional information in such cases;
(b)         
by promptly furnishing the FIU, at its request, with
all necessary information, in accordance with the procedures established by the
applicable legislation.
2.           The information referred
to in paragraph 1 of this Article shall be forwarded to the FIU of the Member State in whose territory the institution or person forwarding the information is
situated. The person or persons designated in accordance with the procedures
provided for in Article 8(4) shall forward the information.
Article 33
1.           By way of derogation from
Article 32(1), Member States may, in the case of the persons referred to in
Article 2(1)(3)(a), (b), and (d) designate an appropriate self-regulatory body
of the profession concerned as the authority to receive the information
referred to in Article 32(1). 
              Without prejudice to
paragraph 2, the designated self-regulatory body shall in cases referred to in the
first subparagraph forward the information to the FIU promptly and unfiltered.
2.           Member States shall not
apply the obligations laid down in Article 32(1) to notaries, other independent
legal professionals, auditors, external accountants and tax advisors only to
the strict extent that such exemption relates to information they receive from
or obtain on one of their clients, in the course of ascertaining the legal
position for their client or performing their task of defending or representing
that client in, or concerning judicial proceedings, including advice on
instituting or avoiding proceedings, whether such information is received or
obtained before, during or after such proceedings.
Article 34
1.           Member States shall
require obliged entities to refrain from carrying out transactions which they
know or suspect to be related to money laundering or terrorist financing until
they have completed the necessary action in accordance with Article 32(1)(a). 
              In conformity with the
legislation of the Member States, instructions may be given not to carry out
the transaction.
2.           Where such a transaction
is suspected of giving rise to money laundering or terrorist financing and
where to refrain in such manner is impossible or is likely to frustrate efforts
to pursue the beneficiaries of a suspected money laundering or terrorist
financing operation, the obliged entities concerned shall inform the FIU
immediately afterwards.
Article 35
1.           Member States shall ensure
that if, in the course of inspections carried out in the obliged entities by
the competent authorities referred to in Article 45, or in any other way, those
authorities discover facts that could be related to money laundering or
terrorist financing, they shall promptly inform the FIU.
2.           Member States shall ensure
that supervisory bodies empowered by law or regulation to oversee the stock,
foreign exchange and financial derivatives markets inform the FIU if they
discover facts that could be related to money laundering or terrorist
financing.
Article 36
The disclosure in good faith as foreseen in
Articles 32 (1) and 33 by an obliged entity or by an employee or director of
such an obliged entity of the information referred to in Articles 32 and 33 shall
not constitute a breach of any restriction on disclosure of information imposed
by contract or by any legislative, regulatory or administrative provision, and
shall not involve the obliged entity or its directors or employees in liability
of any kind.
Article 37
Member States shall take all appropriate
measures in order to protect employees of the obliged entity who report
suspicions of money laundering or terrorist financing either internally or to
the FIU from being exposed to threats or hostile action.
Section 2
Prohibition of disclosure
Article 38
1.           Obliged entities and their
directors and employees shall not disclose to the customer concerned or to
other third persons the fact that information has been transmitted in
accordance with Articles 32 and 33 or that a money laundering or terrorist
financing investigation is being or may be carried out.
2.           The prohibition laid down
in paragraph 1 shall not include disclosure to the competent authorities of
Member States, including the self-regulatory bodies, or disclosure for law
enforcement purposes.
3.           The prohibition laid down
in paragraph 1 shall not prevent disclosure between institutions from Member
States, or from third countries which impose requirements equivalent to those
laid down in this Directive provided that they belong to the same group. 
4.           The prohibition laid down
in paragraph 1 shall not prevent disclosure between persons referred to in
Article 2(1)(3)(a) and (b) from Member States, or from third countries which
impose requirements equivalent to those laid down in this Directive, who
perform their professional activities, whether as employees or not, within the
same legal person or a network. 
              For the purposes of the
first subparagraph, a "network" shall mean the larger structure to
which the person belongs and which shares common ownership, management or
compliance control.
5.           For entities or persons
referred to in Article 2(1)(1), (2) and (3)(a) and (b) in cases related to the
same customer and the same transaction involving two or more institutions or
persons, the prohibition laid down in paragraph 1 of this Article shall not
prevent disclosure between the relevant institutions or persons provided that
they are situated in a Member State, or in a third country which imposes
requirements equivalent to those laid down in this Directive, and that they are
from the same professional category and are subject to obligations as regards
professional secrecy and personal data protection. 
6.           Where the persons referred
to in Article 2(1)(3)(a) and (b) seek to dissuade a client from engaging in
illegal activity, this shall not constitute a disclosure within the meaning of
paragraph 1.
CHAPTER V
RECORD KEEPING AND STATISTICAL DATA 
Article 39
Member States shall require obliged
entities to store the following documents and information in accordance with
national law for the purpose of the prevention, detection and investigation of possible
money laundering or terrorist financing by the FIU or by other competent
authorities:
(a)                   
in the case of the customer due diligence, a
copy or the references of the evidence required, for a period of five years
after the business relationship with their customer has ended. Upon expiration
of this period, personal data shall be deleted unless otherwise provided for by
national law, which shall determine under which circumstances obliged entities
may or shall further retain data. Member States may allow or require further
retention only if necessary for the prevention, detection or investigation of
money laundering and terrorist financing. The maximum retention period after
the business relationship has ended shall not exceed ten years;
(b)                   
in the case of business relationships and
transactions, the supporting evidence and records, consisting of the original
documents or copies admissible in court proceedings under the applicable
national legislation for a period of five years following either the
carrying-out of the transactions or the end of the business relationship,
whichever period is the shortest. Upon expiration of this period, personal data
shall be deleted, unless otherwise provided for by national law, which shall
determine under which circumstances obliged entities may or shall further
retain data. Member States may allow or require further retention only if
necessary for the prevention, detection or investigation of money laundering
and terrorist financing. The maximum retention period following either the carrying-out
of the transactions or the end of the business relationship, whichever period ends
first, shall not exceed ten years. 
Article 40
Member States shall require that their obliged
entities have systems in place that enable them to respond fully and rapidly to
enquiries from the FIU, or from other authorities, in accordance with their
national law, as to whether they maintain or have maintained during the
previous five years a business relationship with specified natural or legal
persons and on the nature of that relationship.
Article 41
1.           Member States shall, for
the purposes of the preparation of national risk assessments pursuant to
Article 7, ensure that they are able to review the effectiveness of their
systems to combat money laundering or terrorist financing by maintaining
comprehensive statistics on matters relevant to the effectiveness of such
systems.
2.           Statistics referred to in
paragraph 1 shall include:
(a)         
data measuring the size and importance of the
different sectors which fall under the scope of this Directive, including the
number of entities and persons and the economic importance of each sector;
(b)         
data measuring the reporting, investigation and
judicial phases of the national anti-money laundering and terrorist financing
regime, including the number of suspicious transaction reports made to the FIU,
the follow-up given to these reports and, on an annual basis, the number of
cases investigated, the number of persons prosecuted, the number of persons
convicted for money laundering or terrorist financing offences and the value in
euro of property that has been frozen, seized or confiscated.
3.           Member States shall ensure
that a consolidated review of their statistical reports is published and shall
transmit to the Commission the statistics referred to in paragraph 2.
CHAPTER VI
POLICIES, PROCEDURES AND SUPERVISION
Section 1
Internal procedures, training and feedback
Article 42
1.           Member States shall
require obliged entities that are part of a group to implement group-wide
policies and procedures, including data protection policies and policies and
procedures for sharing information within the group for anti-money laundering
and combating terrorist financing purposes. Those policies and procedures shall
be implemented effectively at the level of branches and majority-owned
subsidiaries in Member States and third countries.
2.           Member States shall ensure
that where obliged entities have branches or majority-owned subsidiaries
located in third countries where the minimum anti-money laundering and combating
terrorist financing requirements are less strict than those of the Member
State, their branches and majority-owned subsidiaries located in the third
country implement the requirements of the Member State, including data
protection, to the extent that the third country's laws and regulations so allow.
3.           The Member States, EBA, EIOPA and ESMA shall inform each other of cases where the legislation of the third
country does not permit application of the measures required under paragraph 1
and coordinated action could be taken to pursue a solution.
4.           Member States shall
require that, where the legislation of the third country does not permit
application of the measures required under the first subparagraph of paragraph
1, obliged entities take additional measures to effectively handle the risk of
money laundering or terrorist financing, and inform their home supervisors. If
the additional measures are not sufficient, competent authorities in the home
country shall consider additional supervisory actions, including, as
appropriate, requesting the financial group to close down its operations in the
host country.
5.           EBA, EIOPA and ESMA shall
develop draft regulatory technical standards specifying the type of additional
measures referred to in paragraph 4 of this Article and the minimum action to
be taken by obliged entities referred to Article 2(1)(1) and (2) where the legislation
of the third country does not permit application of the measures required under
paragraphs 1 and 2. EBA, EIOPA and ESMA shall submit those draft regulatory
technical standards to the Commission within two years of the date of entry
into force of this Directive.
6.           Power is delegated to the
Commission to adopt the regulatory technical standards referred to in paragraph
5 in accordance with the procedure laid down in Articles 10 to 14 of Regulation
(EU) No 1093/2010, of Regulation (EU) No 1094/2010 and of Regulation (EU) No
1095/2010.
7.           Member States shall ensure
that sharing of information within the group is allowed provided that it does
not prejudice investigation into, or analysis of, possible money laundering or
terrorist financing by the FIU or by other competent authorities in accordance
with national law.
8.           Member States may require
issuers of electronic money as defined by Directive 2009/110/EC of the European
Parliament and of the Council[44]
and payment providers as defined by Directive 2007/64/EC of the European
Parliament and of the Council[45]
established on their territory, and whose head office is situated in another
Member State or outside the Union, to appoint a central contact point in their
territory to oversee the compliance with anti-money laundering and terrorist
financing rules.
9.           EBA, EIOPA and ESMA shall develop draft regulatory technical
standards on the criteria for determining the
circumstances when the appointment of a central contact point pursuant to
paragraph 8 above is appropriate, and what the functions of central contact
points should be. EBA, ESMA and EIOPA shall submit these draft regulatory
technical standards to the Commission within two years of the date of entry
into force of this Directive.
10.         Power is delegated to the
Commission to adopt the regulatory technical standards referred to in paragraph
9 in accordance with the procedure laid down in Articles 10 to 14 of Regulation
(EU) No 1093/2010, of Regulation (EU) No 1094/2010 and of Regulation (EU) No
1095/2010.
Article 43
1.           Member States shall
require that obliged entities take measures proportionate to their risks,
nature and size so that their relevant employees are aware of the provisions adopted
pursuant to this Directive, including relevant data protection requirements.
These measures shall include participation of
their relevant employees in special ongoing training programmes to help them
recognise operations which may be related to money laundering or terrorist
financing and to instruct them as to how to proceed in such cases.
Where a natural person falling within any of
the categories listed in Article 2(1)(3) performs his professional activities
as an employee of a legal person, the obligations in this Section shall apply
to that legal person rather than to the natural person.
2.           Member States shall ensure
that obliged entities have access to up-to-date information on the practices of
money launderers and terrorist financers and on indications leading to the
recognition of suspicious transactions.
3.           Member States shall ensure
that, wherever practicable, timely feedback on the effectiveness of and
follow-up to reports of suspected money laundering or terrorist financing is
provided.
Section 2
Supervision
Article 44
1.           Member States shall
provide that currency exchange offices and trust or company service providers
shall be licensed or registered and providers of gambling services be authorised.

2.           In respect of the entities
referred to in paragraph 1, Member States shall require competent authorities
to ensure that the persons who effectively direct or will direct the business
of such entities or the beneficial owners of such entities are fit and proper
persons.
3.           In respect of the obliged
entities referred to in Article 2(1)(3) (a), (b), (d) and (e), Member States
shall ensure that competent authorities take the necessary measures to prevent
criminals or their associates from holding or being the beneficial owner of a
significant or controlling interest, or holding a management function in those
obliged entities.
Article 45
1.           Member States shall
require the competent authorities to effectively monitor and to take the
necessary measures with a view to ensure compliance with the requirements of
this Directive. 
2.           Member States shall ensure
that the competent authorities have adequate powers, including the power to
compel the production of any information that is relevant to monitoring
compliance and perform checks, and have adequate financial, human and technical
resources to perform their functions. Member States shall ensure that staff of
these authorities maintain high professional standards, including standards of
confidentiality and data protection, they shall be of high integrity and be
appropriately skilled.
3.           In the case of credit and
financial institutions and providers of gambling services, competent
authorities shall have enhanced supervisory powers, notably the possibility to
conduct on-site inspections.
4.           Member States shall ensure
that obliged entities that operate branches or subsidiaries in other Member
States respect the national provisions of that other Member State pertaining to this Directive. 
5.           Member States shall ensure
that the competent authorities of the Member State in which the branch or
subsidiary is established shall cooperate with the competent authorities of the
  Member State in which the obliged entity has its head office, to ensure effective
supervision of the requirements of this Directive. 
6.           Member States shall ensure
that competent authorities that apply a risk-sensitive approach to supervision:

(a)         
have a clear understanding of the money
laundering and terrorist financing risks present in their country; 
(b)         
have on-site and off-site access to all relevant
information on the specific domestic and international risks associated with
customers, products and services of the obliged entities; and 
(c)         
base the frequency and intensity of on-site and
off-site supervision on the risk profile of the obliged entity, and on the
money laundering and terrorist financing risks present in the country.
7.           The assessment of the
money laundering and terrorist financing risk profile of obliged entities,
including the risks of non-compliance, shall be reviewed both periodically and
when there are major events or developments in the management and operations of
the obliged entity.
8.           Member States shall ensure
that competent authorities take into account the degree of discretion allowed
to the obliged entity, and appropriately review the risk assessments underlying
this discretion, and the adequacy and implementation of its policies, internal
controls and procedures.
9.           In the case of the obliged
entities referred to in Article 2(1)(3)(a), (b) and (d) Member States may allow
the functions referred to in paragraph 1 to be performed by self-regulatory bodies,
provided that they comply with paragraph 2 of this Article.
10.         EBA, EIOPA and ESMA shall
issue guidelines addressed to competent authorities in accordance with Article
16 of Regulation (EU) No 1093/2010, of Regulation (EU) No 1094/2010 and of
Regulation (EU) No 1095/2010 on the factors to be applied when conducting
supervision on a risk-sensitive basis. Specific account should be taken of the
nature and size of the business, and where appropriate and proportionate,
specific measures should be foreseen. These guidelines shall be issued within 2
years of the date of entry into force of this Directive.
Section 3
Co-operation
Subsection I
National
co-operation
Article 46
Member States shall ensure that policy
makers, the FIU, law enforcement authorities, supervisors and other competent
authorities involved in anti-money laundering and combating terrorist financing
have effective mechanisms to enable them to co-operate and co-ordinate
domestically concerning the development and implementation of policies and activities
to combat money laundering and terrorist financing.
Subsection II
Co-operation
with EBA, EIOPA and ESMA
Article 47
The competent authorities shall provide EBA,
EIOPA and ESMA with all the information necessary to carry out their duties
under this Directive.
Subsection III
Co-operation
between FIUs and with the European Commission
Article 48
The Commission may lend such assistance as
may be needed to facilitate coordination, including the exchange of information
between FIUs within the Union. It may regularly convene meetings with
representatives from Member States’ FIUs to facilitate co-operation and to
exchange views on co-operation related issues.
Article 49
Member States shall ensure that their FIUs
co-operate with each other to the greatest extent possible irrespective of
whether they are administrative, law enforcement or judicial or hybrid authorities.
Article 50
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 or investigation by the
FIU regarding financial transactions related to money laundering or terrorist
financing and the natural or legal person involved. A request shall contain the
relevant facts, background information, reasons for the request and how the
information sought will be used.
2.           Member States shall ensure
that the FIU to whom the request is made is required to use the whole range of
its powers which it has domestically available for receiving and analysing
information when it replies to a request for information referred to in
paragraph 1 from another FIU based in the Union. The FIU to whom the request is
made shall respond in a timely manner and both the requesting and requested FIU
shall use secure digital means to exchange information, wherever possible.
3.           An FIU may refuse to
divulge information which could lead to impairment of a criminal investigation
being conducted in the requested Member State or, in exceptional circumstances,
where divulgation of the information would be clearly disproportionate to the
legitimate interests of a natural or legal person or the Member State or
irrelevant to the purposes for which it has been collected. Any such refusal
shall be appropriately justified to the FIU requesting the information.
Article 51
Information and documents received pursuant
to Articles 49 and 50 shall be used for the accomplishment of the FIU’s tasks
as laid down in this Directive. When transmitting information and documents
pursuant to Articles 49 and 50, the transmitting FIU may impose restrictions
and conditions for the use of that information. The receiving FIU shall comply
with those restrictions and conditions. This does not affect the use for
criminal investigations and prosecutions linked to the FIU’s tasks to prevent, detect
and investigate money laundering and terrorist financing.
Article 52
Member States shall ensure that FIUs
undertake all necessary measures, including security measures, to ensure that
information submitted pursuant to Articles 49 and 50 is not accessible by any
other authority, agency or department, unless prior approval is given by the
FIU providing the information.
Article 53
1.           Member States shall
encourage their FIUs to use protected channels of communication between FIUs
and to use the decentralised computer network FIU.net.
2.           Member States shall ensure
that, in order to fulfil their tasks as laid down in this Directive, their FIUs
co-operate to apply sophisticated technologies. These technologies shall allow
FIUs to match their data with other FIUs in an anonymous way by ensuring full
protection of personal data with the aim to detect subjects of the FIU’s
interests in other Member States and identify their proceeds and funds.
Article 54
Member States shall ensure that their FIUs
cooperate with Europol regarding analyses carried out having a cross-border
dimension concerning at least two Member States.
Section 4
Sanctions
Article 55
1.           Member States shall ensure
that obliged entities can be held liable for breaches of the national
provisions adopted pursuant to this Directive. 
2.           Without prejudice to the
right of Member States to impose criminal penalties, Member States shall ensure
that competent authorities may take appropriate administrative measures and impose
administrative sanctions where obliged entities breach the national provisions,
adopted in the implementation of this Directive, and shall ensure that they are
applied. Those measures and sanctions shall be effective, proportionate and
dissuasive.
3.           Member States shall ensure
that where obligations apply to legal persons, sanctions can be applied to the
members of the management body or to any other individuals who under national
law are responsible for the breach.
4.           Member States shall ensure
that the competent authorities have all the investigatory powers that are
necessary for the exercise of their functions. In the exercise of their
sanctioning powers, competent authorities shall cooperate closely to ensure
that administrative measures or sanctions produce the desired results and
coordinate their action when dealing with cross border cases.
Article 56
1.           This Article shall at
least apply to situations where obliged entities demonstrate systematic
failings in relation to the requirements of the following Articles:
(a)         
9 to 23 (customer due diligence);
(b)         
32, 33 and 34 (suspicious transaction
reporting);
(c)         
39 (record keeping); and
(d)         
42 and 43 (internal controls).
2.           Member States shall ensure
that in the cases referred to in paragraph 1, the administrative measures and sanctions
that can be applied include at least the following: 
(a)         
a public statement which indicates the natural
or legal person and the nature of the breach;
(b)         
an order requiring the natural or legal person
to cease the conduct and to desist from a repetition of that conduct;
(c)         
in case of an obliged entity subject to an
authorisation, withdrawal of the authorisation;
(d)         
a temporary ban against any member of the obliged
entity's management body, who is held responsible, to exercise functions in
institutions;
(e)         
in case of a legal person, administrative pecuniary
sanctions of up to 10% of the total annual turnover of that legal person in the
preceding business year;
(f)           
in case of a natural person, administrative
pecuniary sanctions of up to EUR 5 000 000, or in the Member States where the euro
is not the official currency, the corresponding value in the national currency
on the date of entry into force of this Directive;
(g)         
administrative pecuniary sanctions of up to
twice the amount of the profits gained or losses avoided because of the breach
where those can be determined.
For the purpose of point (e), where the
legal person is a subsidiary of a parent undertaking, the relevant total annual
turnover shall be the total annual turnover resulting from the consolidated
account of the ultimate parent undertaking in the preceding business year.
Article 57
1.           Member States shall ensure
that competent authorities publish any sanction or measure imposed for breach
of the national provisions adopted in the implementation of this Directive
without undue delay including information on the type and nature of the breach
and the identity of persons responsible for it, unless such publication would
seriously jeopardise the stability of financial markets. Where publication
would cause a disproportionate damage to the parties involved, competent
authorities shall publish the sanctions on an anonymous basis.
2.           Member States shall ensure
that when determining the type of administrative sanctions or measures and the
level of administrative pecuniary sanctions, the competent authorities shall
take into account all relevant circumstances, including:
(a)         
the gravity and the duration of the breach;
(b)         
the degree of responsibility of the responsible
natural or legal person;
(c)         
the financial strength of the responsible
natural or legal person, as indicated by the total turnover of that person or
the annual income of that person;
(d)         
the importance of profits gained or losses
avoided by the responsible natural or legal person, insofar as they can be
determined;
(e)         
the losses for third parties caused by the
breach, insofar as they can be determined;
(f)           
the level of cooperation of the responsible
natural or legal person with the competent authority;
(g)         
previous breaches by the responsible natural or
legal person.
3.           EBA, EIOPA, and ESMA shall
issue guidelines addressed to competent authorities in accordance with Article
16 of Regulation (EU) No 1093/2010, of Regulation (EU) No 1094/2010 and of
Regulation (EU) No 1095/2010 on types of administrative measures and sanctions
and level of administrative pecuniary sanctions applicable to obliged entities
referred to in Article 2(1)(1) and (2). These guidelines shall be issued within
2 years of the date of entry into force of this Directive.
4.           In the case of legal
persons, Member States shall ensure that they may be held liable for
infringements referred to in paragraph 1 of Article 56 which are committed for
their benefit by any person, acting either individually or as part of an organ
of the legal person, who has a leading position within the legal person, based
on any of the following:
(a)         
a power of representation of the legal person;
(b)         
an authority to take decisions on behalf of the
legal person; or
(c)         
an authority to exercise control within the
legal person.
5.           In addition to the cases referred
to in paragraph 4, Member States shall ensure that legal persons can be held
liable where the lack of supervision or control by a person referred to in
paragraph 4 has made possible the commission of the infringements referred to
in paragraph 1 of Article 56 for the benefit of a legal person by a person
under its authority.
Article 58
1.           Member States shall ensure
that competent authorities establish effective mechanisms to encourage
reporting of breaches of the national provisions implementing this Directive to
competent authorities.
2.           The mechanisms referred to
in paragraph 1 shall include at least:
(a)         
specific procedures for the receipt of reports
on breaches and their follow-up; 
(b)         
appropriate protection for employees of
institutions who report breaches committed within the institution;
(c)         
protection of personal data concerning both the
person who reports the breaches and the natural person who is allegedly
responsible for a breach, in compliance with the principles laid down in
Directive 95/46/EC.
3.           Member States shall require
obliged entities to have in place appropriate procedures for their employees to
report breaches internally through a specific, independent and anonymous
channel.
CHAPTER VII
FINAL PROVISIONS
Article 59
Within four years after the date of entry
into force of this Directive, the Commission shall draw up a report on the
implementation of this Directive and submit it to the European Parliament and
the Council.
Article 60
Directives 2005/60/EC and 2006/70/EC are
repealed with effect from [insert date – day after the date set out in the
first subparagraph of Article 61].
References to the repealed Directives shall
be construed as being made to this Directive and should be read in accordance
with the correlation table in Annex IV.
Article 61
1.           Member States shall bring
into force the laws, regulations and administrative provisions necessary to
comply with this Directive by [two years after adoption] at the latest.
They shall forthwith communicate to the Commission the text of those provisions.

When Member States adopt those provisions, they shall contain a reference to this
Directive or be accompanied by such a reference on the occasion of their
official publication. Member States shall determine how
such reference is to be made.
2.           Member States shall communicate
to the Commission the text of the main provisions of national law which they
adopt in the field covered by this Directive.
Article 62
This Directive shall enter into force on
the twentieth day following that of its publication in the Official Journal
of the European Union.
Article 63
This
Directive is addressed to the Member States.
Done at Strasbourg,
For the European Parliament                       For
the Council
The President                                                 The
President
ANNEX I
The following is a non-exhaustive list of risk
variables that obliged entities shall consider when determining to what extent
to apply customer due diligence measures in accordance with Article 11(3):
(i)           The purpose of an account
or relationship;
(ii)          The level of assets to be
deposited by a customer or the size of transactions undertaken;
(iii)          The regularity or
duration of the business relationship.
ANNEX II
The following is a non-exhaustive list of factors
and types of evidence of potentially lower risk referred to in Article 14:
(1)                   
Customer risk factors:
(a)         
public companies listed on a stock exchange and
subject to disclosure requirements (either by stock exchange rules or through
law or enforceable means), which impose requirements to ensure adequate
transparency of beneficial ownership;
(b)         
public administrations or enterprises;
(c)         
customers resident in lower risk geographical
areas as set out in paragraph (3).
(2)                   
Product, service, transaction or delivery
channel risk factors:
(a)         
life insurance policies where the premium is
low;
(b)         
insurance policies for pension schemes if there
is no early surrender option and the policy cannot be used as collateral;
(c)         
a pension, superannuation or similar scheme that
provides retirement benefits to employees, where contributions are made by way
of deduction from wages, and the scheme rules do not permit the assignment of a
member’s interest under the scheme;
(d)         
financial products or services that provide
appropriately defined and limited services to certain types of customers, so as
to increase access for financial inclusion purposes;
(e)         
products where the risk of money
laundering/terrorist financing are managed by other factors such as purse
limits or transparency of ownership (e.g. certain types of electronic money as
defined in Directive 2009/110/EC on the taking up, pursuit and prudential
supervision of the business of electronic money institutions).
(3)                   
Geographical risk factors:
(a)         
other EU Member States;
(b)         
third countries having effective anti-money
laundering/combating terrorist financing systems;
(c)         
third countries identified by credible sources
as having a low level of corruption or other criminal activity;
(d)         
third countries which are subject to
requirements to combat money laundering and terrorist financing consistent with
the FATF Recommendations, have effectively implemented those requirements, and
are effectively supervised or monitored in accordance with the Recommendations
to ensure compliance with those requirements.
ANNEX III
The following is a non-exhaustive list of factors
and types of evidence of potentially higher risk referred to in Article 16(3):
(1)                   
Customer risk factors:
(a)         
the business relationship is conducted in
unusual circumstances;
(b)         
customers resident in countries set out in (3);
(c)         
legal persons or arrangements that are personal
asset-holding vehicles;
(d)         
companies that have nominee shareholders or
shares in bearer form;
(e)         
businesses that are cash-intensive;
(f)           
the ownership structure of the company appears
unusual or excessively complex given the nature of the company’s business.
(2)                   
Product, service, transaction or delivery
channel risk factors:
(a)         
private banking;
(b)         
products or transactions that might favour
anonymity;
(c)         
non-face-to-face business relationships or
transactions;
(d)         
payment received from unknown or un-associated
third parties;
(e)         
new products and new business practices,
including new delivery mechanism, and the use of new or developing technologies
for both new and pre-existing products.
(3)                   
Geographical risk factors:
(a)         
countries identified by credible sources, such FATF
public statements, mutual evaluation or detailed assessment reports or
published follow-up reports, as not having effective anti-money
laundering/combating terrorist financing systems;
(b)         
countries identified by credible sources as having
significant levels of corruption or other criminal activity;
(c)         
countries subject to sanctions, embargos or
similar measures issued by, for example, the United Nations;
(d)         
countries providing funding or support for
terrorist activities, or that have designated terrorist organisations operating
within their country.
ANNEX IV
Correlation table referred to in Article 60.
 Directive 2005/60/EC || This Directive 
 Article 1 || Article 1 
 Article 2 || Article 2 
 Article 3 || Article 3 
 Article 4 || Article 4 
 Article 5 || Article 5 
   || Articles 6 to 8 
 Article 6 || Article 9 
 Article 7 || Article 10 
 Article 8 || Article 11 
 Article 9 || Article 12 
 Article 10(1) || Article 10(d) 
 Article 10(2) || - 
 Article 11 || Articles 13, 14 and 15 
 Article 12 || - 
 Article 13 || Articles 16 to 23 
 Article 14 || Article 24 
 Article 15 || - 
 Article 16 || Article 25 
 Article 17 || - 
 Article 18 || Article 26 
   || Article 27 
 Article 19 || Article 28 
   || Article 29 
   || Article 30 
 Article 20 || - 
 Article 21 || Article 31 
 Article 22 || Article 32 
 Article 23 || Article 33 
 Article 24 || Article 34 
 Article 25 || Article 35 
 Article 26 || Article 36 
 Article 27 || Article 37 
 Article 28 || Article 38 
 Article 29 || - 
 Article 30 || Article 39 
 Article 31 || Article 42 
 Article 32 || Article 40 
 Article 33 || Article 41 
 Article 34 || Article 42 
 Article 35 || Article 43 
 Article 36 || Article 44 
 Article 37 || Article 45 
   || Article 46 
 Article 37a || Article 47 
 Article 38 || Article 48 
   || Articles 49 to 54 
 Article 39 || Articles 55 to 58 
 Article 40 || - 
 Article 41 || - 
 Article 41a || - 
 Article 41b || - 
 Article 42 || Article 59 
 Article 43 || - 
 Article 44 || Article 60 
 Article 45 || Article 61 
 Article 46 || Article 62 
 Article 47 || Article 63 
 Directive 2006/70/EC || This Directive 
 Article 1 || - 
 Article 2(1), (2) and (3) || Article 3(7)(d), (e) and (f) 
 Article 2(4) || - 
 Article 3 || - 
 Article 4 || Article 2(2) to (8) 
 Article 5 || - 
 Article 6 || - 
 Article 7 || - 
[1]               OJ L 214, 4.8.2006, p. 29.
[2]               http://ec.europa.eu/governance/impact/planned_ia/docs/2013_home_006_money_laundering_en.pdf
[3]               OJ L 309, 25.11.2005, p.15.
[4]               OJ L 345, 8.12.2006, p. 1.
[5]               OJ L 309, 25.11.2005, p. 9.
[6]               OJ L 319, 5.12.2007, p. 1.
[7]               OJ L 344, 28.12.2001, p. 70.
[8]               OJ L 139, 29.5.2002, p. 9.
[9]               OJ C 115, 4.5.2010, p. 1.
[10]             Communication from the Commission to the European
Parliament and the Council "The EU Internal Security Strategy in Action:
Five steps towards a more secure Europe" (COM(2010)673 final). 
[11]             COM(2012)238/2
[12]             Proposal for a Directive of the European Parliament and
of the Council on the freezing and confiscation of proceeds of crime in the
European Union (COM(2012)085 final).
[13]             Proposal for a Directive of the European Parliament and
of the Council on the protection of individuals with regard to the processing
of personal data by competent authorities for the purposes of prevention,
investigation, detection or prosecution of criminal offences or the execution
of criminal penalties, and the free movement of such data (COM(2012)010 final)
and Proposal for a Regulation of the European Parliament and of the Council on
the protection of individuals with regard to the processing of personal data
and on the free movement of such data (General Data Protection Regulation)
(COM(2012)011 final). 
[14]             Article 21 of the General Data Protection Regulation.
[15]             COM(2010)716 final.
[16]             "Anti-money laundering and terrorist financing
measures and Financial Inclusion", FATF, June 2011.
[17]             Commission Communication presenting an Action Plan to
strengthen the fight against tax fraud and evasion, adopted by the Commission
on 6 December 2012, COM(2012)722 final
[18]             The feedback statement is available at http://ec.europa.eu/internal_market/company/financial-crime/index_en.htm
[19]             The study is available at http://ec.europa.eu/internal_market/company/financial-crime/index_en.htm
[20]             The impact assessment is available at http://ec.europa.eu/internal_market/company/financial-crime/index_en.htm
[21]             OJ L 178, 17.7.2000, p. 1.
[22]               OJ C , , p. .
[23]               OJ C , , p. .
[24]               OJ C , , p. .
[25]               OJ L 166, 28.6.1991, p. 77.
[26]               OJ L 344, 28.12.2001, p. 76.
[27]               OJ L 309, 25.11.2005, p. 15.
[28]               OJ L 214, 4.8.2006, p. 29.
[29]               OJ L 331, 15.12.2010, p. 12.
[30]               OJ L 331, 15.12.2010, p. 48.
[31]             OJ L 331, 15.12.2010, p. 84.
[32]             OJ L 281, 23.11.1995, p. 31.
[33]             OJ L 271, 24.10.2000, p. 4.
[34]             OJ L 164, 22.6.2002, p. 3.
[35]             OJ L 330, 9.12.2008, p. 21-23.
[36]             OJ L 319, 5.12.2007, p. 1.
[37]             OJ L 177, 30.6.2006, p. 1.
[38]             OJ L 345, 19.12.2002, p. 1.
[39]             OJ L 145, 30.4.2004, p. 1.
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